A defined contribution plan, other than a profit-sharing plan, that provides for an individual account for each participant and for fixed or determinable contributions by the employer. So called because the amount of the employee's retirement benefits will be determined by the value of the cashed-out investment purchased with contributions made on the employee’s behalf during employment. Employers must contribute a fixed amount annually to these plans. A-H R-Z net asset value The current worth of a share in a particular fund, calculated by totaling the market value of all securities owned by the fund, plus cash and other assets, subtracting any liabilities and dividing the result by the number of fund shares outstanding. Share prices increase or decrease based on activity in the underlying securities of the fund. Also called “NAV”, “share price” or “share value.
Type of Defined Contribution Plan in which the amount of the contribution is specificed as a fixed percent of compensation and the employer must contribute that amount annually, regardless of profits. Also referred to as a 401(a) Plan created under Section 401(a) of the Internal Revenue Code.