Definite program for funding of benefits followed during participant's service. Actuary determines contributions necessary. Benefits can be projected at any point in time. Can enhance benefits to older employees. Can offer higher benefits to top management with lesser tenure.
Employer can maximize tax deduction.
Salary deferrals by employee are pre-tax. Employer contribution is discretionary, not required. Employer can elect to make matching contributions. Employer is entitled to a tax deduction for the amount of the contribution. Self-directed or managed by an investment officer within participant s guidelines.