Investopedia

Continue to Site »

Employer-Sponsored Plan

Filed Under » , , ,
Dictionary Says

Definition of 'Employer-Sponsored Plan'

A type of benefit plan that an employer offers for the benefit of his/her employees at no or a relatively low cost to the employees. If employees participate in the plan, they will benefit from its low-cost method of obtaining discounted services. The benefit to the employer is that initiating these plans usually has some tax-deductible component, and sponsoring benefits is generally a good method of retaining valuable employees.
Investopedia Says

Investopedia explains 'Employer-Sponsored Plan'

Different classes of employer-sponsor plans include retirement saving plans and group healthcare plans.

Employer-sponsored retirement savings plans are useful for the employees because it presents them with an automatic savings device, provides tax breaks and, in some cases, offers free money in terms of employers matching the employee's contributions. Some examples of retirement employer-sponsored savings plans are 401(k)s and the some forms of IRAs.

Group healthcare plans are often seen as a premium for employees due to the rising cost of healthcare services.

Articles Of Interest

  1.

    7 Tools For Rebuilding Retirement Savings

    If your nest egg has taken a hit, these conservative investments could help get you back on track.

  2. Can You Deduct Your IRA Contributions?

    We help you answer this important question, which is determined by whether you are considered an "active participant".

  3. 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?

  4. Is a person an active participant in an employer-sponsored retirement plan if he or she was only active for a short time?

    Yes. An individual is considered an active participant even if his or her participation in the plan has been for only a short period. It is the actual credit to the retirement plan that results ...

  5. 401(k) Plans For The Small Business Owner

    If you own a business, this may be the plan for you! Find out about its benefits and eligibility requirements.

  6. Common Questions About Retirement Plans

    We offer some solutions for the individual taxpayer as well as the small business owner.

  7. How To Cure An Ailing 401(k)

    High-cost, outdated plans can prevent your retirement portfolio from thriving.

  8. Can I contribute to my company-sponsored 401(k) after the company's year-end but before its tax-filing date?

    Unlike IRAs, where contributions can be made for the previous year up to April 15 of the current year, salary deferral contributions generally apply to they year in which they are actually withheld ...

  9. Roth IRAs Tutorial

    This comprehensive guide goes through what a Roth IRA is and how to set one up, contribute to it and withdraw from it.

  10. 403(b) Plan Tutorial

    Learn about the set-up, the contributions to and the distributions from this retirement plan for certain employees of public schools and tax-exempt organizations.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Abatement Cost

    A cost borne by many businesses for the removal and/or reduction of an undesirable item that they have created.

  2. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  3. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  4. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  5. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  6. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.
Trading Center