Definition of 401k

A qualified retirement plan offered by an employer to help employees plan for their retirement. A 401K plan is a qualified plan that allows both the employer and the employee significant tax advantages.

Applying "401k" to Securities Exams:

401K and thrift plans allow employees to contribute a fixed percentage of their salary to their retirement account and have the employer match some

or all of their contributions. 401 K plans are regulated under The Employee Retirement Income Securities Act of 1974 also known as ERISA. Employer contributions are subject to ERISA’s communication and vesting requirements.

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