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defined-contribution plan

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Financial Dictionary

Defined-Contribution Plan

A retirement plan wherein a certain amount or percentage of money is set aside each year for the benefit of the employee. There are restrictions as to when and how you can withdraw these funds without penalties.

Investopedia Commentary

There is no way to know how much the plan will ultimately give the employee upon retiring. The amount contributed is fixed, but the benefit is not.

Related Links

Introductory Tour through Retirement Plans
Keeping Track Of Your Assets

See also: Cash Balance Pension Plan, Defined-Benefit Pension Plan, Pension Plan, Pension Shortfall, Superannuation

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