Defined Contribution Plans
A Defined Contribution Plan defines the contribution the company will make to the plan and how the contribution will be allocated among the eligible employees. Separate account balances are maintained for each employee. The employee’s account grows through employer contributions, investment earnings and in some cases forfeitures. Some plans may also permit employees to make contributions on a before-and/or after-tax basis. Since the contributions, investment results and forfeiture allocations vary year by year, the ultimate retirement benefit cannot be predicted.