Discretionary plan

EmployerOptional

These are the most flexible plans where employer contributions are at their own discretion and are not required, therefore the plan is subject to annual calculations and discrimination testing. The employer can also opt for vesting schedules, where an employee’s right to the contributions becomes nonforfeitable after a period of time. This creates an incentive for the employee to stay with the organization.

Last updated byAvatar photoDan Conover