A defined contribution plan where contributions are based on the employee's earnings and can vary. It is possible for an employer to still contribute to the plan even if no profits are generated. Also, there is no minimum contribution necessary.

A plan established and maintained by an employer through which an employer may change the amount of the annual contribution each year. Employer contributions are not required on an annual basis, but must be substantial and recurring. Funds in a profit-sharing plan are tax-deferred until withdrawn.

A form of qualified, employer-sponsored retirement plan under which a portion of the profits are set aside for distribution to the employees. In many cases, the employees make tax-deductible distributions, which may be matched by the company.

An incentive system providing that employees share in company profits through a cash fund or a deferred plan used to buy stock or bonds.

a defined contribution plan whereby the employer contribution made into the plan is a discretionary decision made by the employer each year

a defined contribution retirement plan funded by an employer with discretionary employer contributions

a plan established and maintained by an employer to provide for the participation in his profits by his employees or their beneficiaries

a plan for sharing your business profits with your employees

a QRP that offers greater flexibility in choosing the percentage of income you may contribute each year and does not require an annual contribution

a Qualified Retirement Plan (QRP) that allows you to make substantial contributions for yourself and any eligible employees you may have

a type of qualified defined contribution plan in which you, the employer, contribute to the accounts of participating employees

an agreement between a corporation and its employees that allows the employees to share in company profits. Annual contributions are made by the company, when it has profits, to a profit-sharing account for each employee, either in cash or in a deferred plan, which may be invested in stocks, bonds, or cash equivalents. The funds in a profit-sharing account generally accumulate tax deferred until the employee retires or leaves the company. Many plans allow employees to borrow against profit-sharing accounts for major expenditures such as purchasing a home or financing children's education. Because corporate profit-sharing plans have custody over billions of dollars, they are major institutional investors in the stock and bond markets.

The type of defined contribution plan in which your employer contributes a certain amount of money to the plan each year or on a regular basis. The amount contributed usually is based on your employer's profits for that year.

A qualified retirement plan, which calculates employer contributions as a percentage of each eligible employee's compensation.

The name of this kind of plan is a little misleading. A profit-sharing plan may be, but is not required to be, funded from the company's profits. That kind of funding is permitted, of course. But the terms of the plan will set forth a formula to determine how much should be contributed each year, or the plan may leave the amount to the employer's discretion. Unlike other kinds of plans, it may be set up in a manner that makes it tax-exempt. Refer to the entries for "employee stock option plan," above, and "stock bonus plan," below, for a description of two common forms of a profit-sharing plan.

a plan or program for sharing company profits with the firmâ€(tm)s employees.

an individual account plan a company provides to allow employees or their beneficiaries to participate in its profits. The plan must have a set formula for allocating the contributions among the participants.

An agreement under which employees share in the profits of their employer. The company makes annual contributions to the employees' accounts. These funds usually accumulate tax deferred until the employee retires or leaves the company.

A qualified retirement plan established by an employer for the benefit of its employees and their beneficiaries in which contributions may vary each year according to the corporation's actual profits.

An employee benefit plan established and maintained by an employer whereby the employees receive a share of the profits of the business. The money may be paid directly to the employee, deferred until retirement, or a combination of both approaches.

A type of defined contribution plan funded with discretionary employer contributions and often tied to company profits.

A flexible arrangement between a corporation and its employees that lets staff share in company profits. Usually a defined contribution plan based on each participant's compensation and on other factors such as corporate results, the plan payout can vary annually and no minimum contribution to participant accounts is required.

Defined contribution plan in which contributions are set at the employer's discretion.

A plan wherein the employees get a share in the profits of the company. The company decides what portion of the profit will be shared. Each employee then receives, into an account, a percentage of those profits based on their earnings. There are restrictions as to when and how you can withdraw these funds without penalties.

A retirement plan funded by employer contributions that are based on a share of the company's profits. Employees are frequently responsible for managing the money themselves, selecting from such investments as mutual funds, company stock and guaranteed investment contracts. Investment gains are not taxed until the money is drawn.

A defined contribution plan established and maintained by an employer, which allows eligible employees to share in generated profits, and enables an employer to make annual contributions on a discretionary basis. back to the top

A tax-deferred retirement account that allows employers to make flexible, non-mandatory contributions, that are typically based on corporate profitability.