A pension plan calling for definite annual contributions by the employer but with no specific benefit promised to the employee. The employee’s benefits are ultimately determined by the amount contributed plus the investment income.
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US: A pension plan calling for definite annual contributions by the employer but with no specific benefit promised to the employee. The employee’s benefits are ultimately determined by the amount contributed plus the investment income.
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MEDICAL,USA: Retirement plan that states the amount of yearly contributions that the plan sponsor will make on behalf of a plan participant such as a 401(k), Keogh, or individual retirement account (IRA). This type of plan does not guarantee a certain amount of retirement benefits. A participant’s benefits when retired are based on the amount that was contributed to the participant’s account plus any investment earnings. Under a defined contribution plan, the employee directs the investment of his or her retirement savings. These kinds of plans are not covered by the Pension Benefit Guaranty Corporation.