A pension plan that establishes the basis on which an employer will contribute to a pension plan is referred to as a

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A defined-contribution plan establishes the basis on which an employer will contribute a certain amount or percentage of an employee's salary to their retirement account. The amount of retirement benefits depends on the amount contributed and investment returns earned on the contributions. In contrast, a defined-benefit plan promises a specific retirement benefit amount, which is often determined by a formula based on factors such as an employee's salary history and years of service. Contributory and noncontributory refer to whether the employee is required to contribute to the pension plan, which is separate from the basis on which the employer contributes.

A Pension Plan That Establishes the Basis on Which an Employer