37:533:313 Lecture Notes - Lecture 10: Defined Contribution Plan, Employee Benefits, Lump Sum

• School: Rutgers University
• Department: Human Resource Management
• Course: 37:533:313
• Professor: fulmer

Document Summary

Defined benefit plans guarantee retirement benefits specified in the plan document. This benefit usually is expressed in terms of a monthly sum equal to a percentage of a participant"s preretirement pay multiplied by the number of year he or she has worked for the employer. Defined contribution plans may require that employers and employees make annual contributions to retirement fund accounts established for each participating employee, based on a formula contained in the plan document. Qualified plans welfare and pension plans that meet various requirements set forth by the employee. Retirement income security act of 1974; these plans entitle employees and employers to favorable tax treatment by deducting the contributions from taxable income, they do not disproportionately favor highly compensated employees. Nonqualified plans welfare and pension plans that do not meet various requirements set forth by the. Employee retirement income security act of 1974, disallowing favorable tax treatment for employee and employer contributions.