What is the difference between a 401(a) plan and a 401k plan?
Answer: People often refer to a 401(a) plan as an "employer only" contribution plan, i.e. the plan participants make no elective contributions. Usually when someone says 401(a), they mean a profit sharing plan, employee stock ownership plan or money purchase pension plan. But in reality, any qualified pension plan is a 401(a) plan, including a 401k plan. A 401k plan is a type of profit sharing plan and is a qualified plan under section 401(a) of the Internal Revenue code.
This is for educational purposes only. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.
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