Qualified Retirement Plans
Written by Retirement Writer on September 11th, 2008When thinking about your future and retirement, talk to your employer about a Qualified Retirement Plan. This is a plan that meets the requirements of both the Internal Revenue Code, section 401 (a), as well as the Employee Retirement Income Security Act that was passed in 1974.
There are 2 different types of qualified retirement plans. One is called the Defined Benefits Plan, and the other is called the Defined Contributions Plan. They are both set up to receive special tax regulations. These regulations can be extended once a person retires, by moving them into another program, such as an IRA.
A Defined Benefits Plan is usually a determined amount of annual funds that are put into an account for an individual. There can be certain penalties on these plans if a person puts in for an early termination or if the plan is forfeited. The main Benefit Plans are flat benefits plans and unit benefits plans.
A Defined Contributions Plan is the more common type of Qualified Retirement Plans. This includes such plans as 401(k) programs, profit sharing plans, and money purchase pension plans. With this type of plan, an employee can have funds put into their account from stocks, contributions from the company, or sharing in the company’s profits.
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