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.

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.



comments powered by Disqus
Hot Definitions
  1. Direct Bidder

    An entity that purchases Treasury securities at auction for a house account rather than on behalf of another party.
  2. Mortgage Modification

    A permanent change in a homeowner's home loan terms that makes the monthly loan payments affordable.
  3. Leveraged Benefits

    The use – by a business owner or professional practitioner – of their company’s receivables or current income to secure a loan whose proceeds then indirectly fund a retirement plan.
  4. Direct Consolidation Loan

    A loan that combines two or more federal education loans into a single loan. A Direct Consolidation Loan allows the borrower to make a single monthly payment. The loan is facilitated by the U.S. Department of Education and does not require borrowers to pay an application fee.
  5. Through Fund

    A type of target-date retirement fund whose asset allocation includes higher risk and potentially higher return investments "through" the fund's target date and beyond.
  6. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold or disposed of first.
Trading Center