Quick Definition

A 401(a) plan is a type of employer-sponsored retirement plan that allows for contributions by both the employer and the employee, often used by government and nonprofit employers.

Examples

• 1A city government offers a 401(a) plan to its employees, contributing a fixed percentage of each employee's salary.
• 2A nonprofit organization matches the contributions its employees make to their 401(a) plans up to a certain amount.
• 3A public school system provides a 401(a) plan with varying contribution rates based on the length of service and salary of the employee.

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