DEFINED CONTRIBUTION PLAN
\dɪfˈa͡ɪnd kˌɒntɹɪbjˈuːʃən plˈan], \dɪfˈaɪnd kˌɒntɹɪbjˈuːʃən plˈan], \d_ɪ_f_ˈaɪ_n_d k_ˌɒ_n_t_ɹ_ɪ_b_j_ˈuː_ʃ_ə_n p_l_ˈa_n]\
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A type of pension plan that does not guarantee any particular pension amount upon retirement. Instead, the employer pays into the pension fund a certain amount every month, or every year, for each employee. The employer usually pays a fixed percentage of an employee's wages or salary, although sometimes the amount is a fraction of the company's profits, with the size of each employee's pension share depending on the amount of wage or salary. Upon retirement, each employee's pension is determined by how much was contributed to the fund on behalf of that employee over the years, plus whatever earnings that money has accumulated as part of the investments of the entire pension fund.
By Oddity Software
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