Employee Savings Plan


DEFINITION of 'Employee Savings Plan'

A pooled investment account provided by an employer that allows employees to set aside a portion of their pretax wages for retirement savings or other long-term goals (i.e. paying for college tuition, purchasing a home). Many employers match their employees' contributions up to a certain dollar amount, or by a certain percentage.

BREAKING DOWN 'Employee Savings Plan'

Employees are always fully vested in their own employee savings plan (ESP) contributions. However, many plans require that employees remain employed for a minimum amount of time before they are vested and eligible to withdraw employer-matched funds. ESPs can be an attractive and relatively easy way for employees to lower their taxes and save for long-term goals.

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  1. My company is the trustee of our 401k plan (which has 112 participants). What are ...

    The answer may vary depending on the plan provider and the provisions of the plan document. For questions relating to a specific ... Read Full Answer >>
  2. How does a Roth IRA grow over time?

    Your Roth IRA account grows over time thanks to two funding sources: contributions and earnings. While your contributions ... Read Full Answer >>
  3. Can my 401(k) be seized or garnished?

    As long as your retirement funds are held in your 401(k) and you do not take them as distributions, your 401(k) cannot be ... Read Full Answer >>
  4. Can my IRA be taken in a lawsuit?

    Whether your IRA can be taken in a lawsuit depends largely on your state of residence and the judgment in question. There ... Read Full Answer >>
  5. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
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    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>

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