Defined contribution plans specify the amount of cash that the employer puts into the plan for the benefit of the employee.

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Defined contribution plans, such as 401(k) plans, require employers to contribute a certain amount of cash into the plan for the benefit of the employee. This amount is often a percentage of the employee's salary or a fixed dollar amount determined by the employer. However, the final benefit amount that the employee receives depends on the performance of the plan's investments, so there is no guarantee of a specific benefit amount.

Defined Contribution Plans Specify the Amount of Cash That the Employer