Defined Contribution Plan Defined Contribution Plan
An employer-sponsored retirement program in which the participant sets aside a portion of his or her salary each year in an investment account on a tax-deferred basis. Contributions to DC plans may be deductible from current income, and employers may augment savings with matching contributions. The actual value of assets available to fund retirement will depend on investment performance. Profit-sharing, employee stock ownership, 401(k), 403(b), and 457 programs are all defined contribution plans.