You authorize your employer to deduct from your gross salary a fixed amount each pay period, which reduces your taxable income. Profit sharing plans . Some companies make additional contributions by sharing a percentage of their profits with employees. Employee stock purchase plans .
Some companies offer discounts to employees on the companies' publicly traded stock.
Oracle Corp., for instance, sets aside shares for employees to buy at a 15 percent discount to the market price. The PBGC does not guarantee defined contribution plans since employees have responsibility to fund their own retirement plans. Unlike defined benefit plans , defined contribution plans can be transferred to a new employer. Range of investment choices . Mutual funds want to sign up your employer so they can provide retirement planning services to you.