401(k) Plan

Summary

A type of employer-sponsored qualified retirement plan that is a defined contribution plan and has a cash or deferred arrangement (CODA) feature. 401(k) plans allow employees to defer a portion of their compensation to the plan trust on a pre-tax basis (and sometimes also on an after-tax basis, which may involve a Roth 401(k) Plan feature). The term is frequently used in a generic sense to refer to defined contribution retirement plans more broadly, including those involving employer matching or other employer contributions.