A Defined Contribution Plan provides an individual account for each participant with benefits based on the amount contributed into the plan, which can also be affected by income, expenses, and gains and losses.

There are no promises of a set monthly benefit at retirement. Some examples of defined contribution plans include 401(k) plans, 403(b) plans, employee stock ownership plans and profit sharing plans.

Advantages of a Defined Contribution Plan include tax deferred retirement savings, participants usually have a say in how much they choose to save and the plan can be funded through payroll deductions. Also, lump sum distributions may be eligible for special 10-year averaging, participants can benefit from good investment results and, in general, they are easily understood by participants.

Benefit Design can give you more insight into these options and help you determine the best elements to include in your company’s program.

For a no-obligation quote, use our online Quote Forms under Resources or call 480.998.0096.