Business and Personal Finance Dictionary

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• EMPLOYER SPONSORED RETIREMENT PLAN
  
  Employers may offer their employees either defined benefit or defined contribution retirement plans, or they may make both types of plans available. Any employer may offer a defined benefit plan, but certain types of defined contributon plans are available only through specific categories of employers. For example, 403(b) plans may be offered only by tax-exempt, not-for-profit employers, 457 plans only by state and municipal governments, and and SIMPLE plans only by employers with fewer than 100 workers. Corporate employers who contribute to a retirement plan that meets Internal Revenue Service (IRS) guidelines can take a tax deduction for the amount of their contribution and may enjoy other tax benefits. Offering a retirement plan may also make the employer more attractive to potential employees. However, employers are not required to offer plans. If they do, they can make the plan as generous or as limited as they choose as long as the plan meets the government's nondiscrimination guidelines.
  
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