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Defined Contribution Plan

Defined Contribution Cafeteria Plans feature company provided funds that employees can apply toward the cost of various benefits.  These “Credit Dollars” can be allocated as a flat amount for each employee. Employees can use these funds to purchase benefits that the employer has made available to them.  Employers can require employees to participate in certain benefits, provided the employer funds cover the cost of the benefit.  Other benefits may allow employees to voluntarily participate. If the costs of the employee’s benefit selections exceed the company provided funds, the employee can have the balance deducted from their own wage.  Unused company credits (amount determined by the employer) are available for employees to receive as additional taxable income.

Employers create a significant Benefit plan designed to:

  • Identify benefits as part of employees’ overall compensation
  • Manage their benefit cost budget accurately
  • Provide flexibility of employee choices within budgetary guidelines
  • Evoke employees to use benefits funds wisely
  • Provide a market competitive benefit package

Employees have a comprehensive benefit package that allows them to:

  • Choose the benefits that are most valuable to them
  • Understand the total cost of the benefits they elect
  • Appreciate the nondiscriminatory nature of the benefit allocation
  • Save significant tax dollars on the out-of-pocket benefit costs
  • Receive taxable wage if they don’t have benefit needs

To learn more about our Defined Contribution Plans, watch our Webinar Videos, view the PDF information available, or contact our Marketing Department.