A qualified retirement plan is a retirement plan that allows a company to make tax-deductible contributions to employees through either a defined-benefit plan or a defined-contribution plan.
The three major types of employer qualified retirement plans are (1) defined contribution, (2) defined benefit, and (3) salary-reduction plans.
The general trend is that companies are shifting away from defined benefit plans and towards defined contribution plans.
The three types of defined contribution plans are (1) discretionary contribution plans, (2) fixed contribution plans, and (3) salary-reduction plans.
In relation to an employer’s contributions to your retirement fund, “vesting” is the process through which the employer’s contributions actually become your property. It is important to know your employer’s vesting requirements so that you are able to meet the requirements to gain full ownership of them.
