Employee Savings Plan

AAA

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.

INVESTOPEDIA EXPLAINS '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.



RELATED TERMS
  1. Employment Agency Fees

    An employment agency works to match employers with suitable employees. ...
  2. Vested Interest

    1. The lawful right of an individual or entity to gain access ...
  3. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
  4. Savings Incentive Match Plan For ...

    A retirement plan that may be established by employers, including ...
  5. Employer-Sponsored Plan

    A type of benefit plan that an employer offers for the benefit ...
  6. Portable Benefits

    Benefits that have been paid into or accrued in an employer-sponsored ...
RELATED FAQS
  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. Places where I can open an IRA Account?

    An individual retirement account can be opened through a range of major financial institutions, including brokerage firms ... Read Full Answer >>
  3. What does a merger or acquisition mean for the target company's employees?

    Suppose one sporting goods manufacturer merges with or acquires another sporting goods manufacturer. Before the merger and ... Read Full Answer >>
  4. What is the difference between CI (competitive intelligence) and competitive analysis?

    The difference between competitive intelligence and competitive analysis is that competitive intelligence refers to the understanding ... Read Full Answer >>
  5. Why is social responsibility important to a business?

    Social responsibility is important to a business because it demonstrates to both consumers and the media that the company ... Read Full Answer >>
  6. Why is it less than ideal for a CEO of a company to also hold the position of COO?

    When it comes to executive-level positions within an organization, assigned titles and the roles associated with each can ... Read Full Answer >>
Related Articles
  1. Savings

    Don't Forget The Kids: Save For Their Education And Retirement

    Retirement and education financing are the two most important planning items for taxpayers.
  2. Taxes

    How After-Tax Rollovers Affect Your IRA

    Consolidating retirement assets? Make sure you account for pre-tax and after-tax assets separately.
  3. Retirement

    Saving For Retirement: The Quest For Success

    We'll show you how to set yourself up to retire in style.
  4. Taxes

    How To Save More For Your Retirement

    The Economic Growth and Tax Relief Reconciliation Act of 2001 made it easier to prepare for the future. Will you be ready?
  5. Economics

    Top 10 Cities For Grads To Get Jobs

    A look at latest employment stats.
  6. Investing News

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  7. Professionals

    Advisors: Don't Overlook Not-Yet-Rich Millennials

    Financial advisors looking to grow their practices should focus on potential high-net-worth millennials.
  8. Retirement

    Converting A Traditional IRA To A Roth

    When is it a good idea to convert traditional IRA funds into Roth IRA funds? And when does it not make sense?
  9. Professionals

    Your Clients and the Changing Retirement Landscape

    For many, retirement might not be the full stoppage of work and living a life of leisure but rather one of slowly phasing out of the workforce.
  10. Savings

    Where To Change Money in San Francisco

    The San Francisco airport and your hotel are convenient, but to save money use an ATM or your credit card.

You May Also Like

Hot Definitions
  1. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
  2. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  3. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  4. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  5. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  6. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
Trading Center