A Defined Contribution Plan is…

June 30th, 2009

A defined contribution plan is a retirement plan in which the company you work or you (sometimes both) put money into the employees plan sometimes at a rate, such as 5% of annual income.  That money is generally invested on the employee’s behalf.  At the time of the withdrawal, the amount that the employee will receive is not guaranteed because it fluctuates with the investments.  An example of a DCP is a 401(k) plan.

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