Definitions for "Profit sharing plan"
An employee-benefit plan whereby the employer pays a portion of the company's profits to the employees. The employer's contributions are discretionary and may be (a) paid in cash or stock when profits are determined, (b) deferred to individual accounts for each employee, or (c) distributed by a combination of the two methods. Profit-sharing plans can be used as a source of retirement income or as a more short-term savings/investment vehicle.----------[ Back
Type of Defined Contibution Plan in which the employer makes substantial and recurring discretionary contributions based on an employee's current-year compensation.
Defined contribution plan characterized by the setting aside of a portion of an entity's profits in participant's accounts. (See Employee Benefit Plan.)