Business / Human Resources (HR) / Retirement Plan
Retirement Plan: A written qualified or nonqualified benefit plan, funded by employer and employee contributions, that provides retirement income benefits for employees.
Employee Retirement Income Security Act (ERISA): A broad-reaching law that establishes the rights of pension plan participants, standards for the investment of pension plan assets, and requirements for the disclosure of plan provisions and funding.
Employee Stock Ownership Plan (ESOP): An ESOP is a trust to which a company contributes shares of newly issued stock, shares the company has held in reserve, or the cash to buy shares on the open market. The shares go into indiv . . . View Full Definition
Salary Reduction Plan: A salary reduction plan is a type of employer-sponsored retirement savings plan. Typical examples are 401(k)s, 403(b)s, 457s, and SIMPLE IRAs. A salary reduction plan allows you, as an emplo . . . View Full Definition
Self-Directed Retirement Plan: If you participate in a salary reduction retirement plan, such as a 401(k) or a 403(b), you usually must select the investments into which your contribution goes from a menu of choices your . . . View Full Definition
Simplified Employee Pension Plan (SEP): An SEP is a qualified retirement plan set up as an individual retirement annuity (IRA) in an employee's name. You can establish an SEP for yourself if you own a small business, or you may pa . . . View Full Definition
Defined Benefit Plan: A defined benefit plan — popularly known as a pension — provides a specific benefit for retired employees, either as a lump sum or as income for the rest of their lives. Sometimes the employ . . . View Full Definition
Defined Contribution Plan: In a defined contribution retirement plan, the benefits — that is, what you can expect to accumulate and ultimately withdraw from the plan — are not predetermined, as they are with a defined . . . View Full Definition
Employer Sponsored Retirement Plan: Employers may offer their employees either defined benefit or defined contribution retirement plans, or they may make both types of plans available. Any employer may offer a defined benefit . . . View Full Definition
Cash Balance Plan: A cash balance retirement plan is a defined benefit plan that has many of the characteristics of a defined contribution plan. The benefit that you'll be entitled to builds up as credits to a . . . View Full Definition