profit-sharing
DefinitionAn arrangement in which an employer shares some of its profits with its employees. The compensation can be stocks, bonds, or cash, and can be immediate or deferred until retirement. Profit-sharing allows for changing contributions each year. Contributions are determined by a formula to allocate the overall contribution and distribution of accumulated funds after the retirement age. Unless the plans are defined as an elective deferral plan, the contributions are not tax deductible. Contributions and earnings can grow tax-deferred until withdrawal.
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profit-sharing is ...
... part of the Retirement subject.
... part of the Retirement subject.
Related Terms
stock bonus plan, Cash or Deferred Arrangement, Prudent Expert Act, CODA, money purchase pension plan, Leveraged Employee Stock Ownership Plan (LESOP)
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