Defined Contribution Plans
A Defined Contribution (DC) retirement plan - like a 401(k) plan - lets employees save for retirement by reducing current salary on a before-tax basis.
This plan provides an individual account for each participant. Benefits are based on the amount contributed to the account.
What are the advantages of a Defined Contribution retirement program?
- It is mostly funded from dollars paid as salary.
- The retirement plan lets you deduct your contributions from taxes as a business expense
- It helps recruit and keep quality employees
- It helps employees build retirement security
Employee Advantages
A Defined Contribution retirement plan allows employees to:
- Save through easy payroll deduction.
- Choose the amount they want to save.
- Change the amount saved to meet current needs.
- Reduce their taxable income.
- Defer taxes on the amount saved and its earnings until the participant receives benefits from the retirement plan.
We have the expertise
Your retirement plan will be supported by our staff and services with a proven track record:
- One of the nation's 401(k) leaders[1]
- Serves more than 32,500 Defined Contribution plans nationwide and currently has more than $83 billion in assets.[2]
See how plan services benefit everyone
As a plan sponsor for a Defined Contribution retirement plan, both you and your participants will have access to premium service and solutions. Details
Already working with a Third-Party administrator?
You can also unbundle your retirement plan services with The Principal to help meet your individual needs.
Keeping You Informed
- Fiduciary Handbook - an excerpt - Understand the complex rules governing qualified retirement plans.
- Pension Protection Act - Find out how this legislation could affect your retirement plan.
