Is A 401k An Employer Sponsored Retirement Plan? 
A 401 -LRB- k -RRB- is an qualified employer sponsored , defined contribution plan under ERISA , the Employee Retirement Income Security Act of 1974 . The contributions are tax deductible . -LRB- Some employers match some portion of the employee 's contribution . -RRB- The account accumulates tax deferred . And distributions are taxed as ordinary income at the effective tax bracket rate of the plan participant . 