401(k) plan

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Pensions - defined contribution - US.

The term 401(k) refers to subsection 401(k) of the US Internal Revenue Code.


A 401(k) pension plan is a defined contribution plan where an employee can make contributions from their salary.

The contributions go into a tax-advantaged 401(k) account, with the employee often choosing the investments based on options provided under the plan.

In some plans, the employer also makes voluntary contributions such as matching the employee’s contributions up to a certain percentage.

Some 401(k) plans have mandatory employer contributions.


See also