The following are some of the most common types of defined contribution plans. This is the most popular of the defined contribution plans and is most commonly offered by larger employers.
Employers often match employee contributions.
Tax-Sheltered Annuity Plan. Investments are made in tax-sheltered annuities or mutual funds. The Savings Incentive Match Plan for Employees of Small Employers is one of the newest types of employer-based retirement plans. The employer shares company profits with employees, usually based on the level of each employee s wages. Employee stock ownership plans are similar to profit-sharing plans, except that an ESOP must invest primarily in company stock.