Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Reviewed by Jeffrey Johnson
Managing Editor & Insurance Lawyer

UPDATED: Feb 20, 2013

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Defined contribution plans require the employer to contribute certain amounts each year to a retirement account established for you. A 401(k) plan is one type of defined contribution plan. Other types of defined contribution plans include profit-sharing plans, money purchase plans and employee stock ownership plans.

Defined benefit plans promise you a monthly pension of a certain amount, usually based on your average income during your final years of employment, your age at retirement and your years of service, but there is no actual account set up for you.

There are a lot of variations within these two broad categories of pension plans. It’s important to know these terms because these two types of plans function differently and the law law treats them differently.