We’ll help you navigate the complexities of retirement
A defined contribution plan is a type of qualified retirement plan. Under this plan, an account is created for each individual employee. The employee’s account grows through employer contributions, investment earnings and, in some cases, forfeitures. Some plans may also permit employees to make contributions on a before and/or after-tax basis.
Unlike a defined benefit plan, the future retirement benefit cannot be predicted in a defined contribution plan because contribution amounts, investment results, and forfeiture allocations change yearly. The employee’s retirement, death or disability benefit is based on the amount in his or her account at the time the distribution is payable.
Employer account balances may be subject to a vesting schedule. Non-vested account balances forfeited by former employees can be used to reduce employer contributions or be reallocated to active participants. For example, if an employee leaves before his funds are fully vested, the amount that was originally contributed to that employee’s account by the employer could then be put back into a pool of funds and redistributed to existing employees.
Here is general information about the most popular types of retirement programs that TriStar works with. Our consultants will help you choose and customize the plan that is best for you. Learn more about defined contribution retirement plans below: