In the United States, a 401(a) plan is a tax-deferred retirement savings plan defined by subsection 401(a) of the Internal Revenue Code.[1] The 401(a) plan is established by an employer, and allows for contributions by the employer or both employer and employee.[2] Contribution amounts, whether dollar-based or percentage-based, eligibility, and vesting schedule are all determined by the sponsoring employer.[3]
These plans are available to some employees of the government, educational institutions, and non-profits, and their funds can be rolled over to a different qualified retirement plan, such as a 401(k) or IRA,[4] when changing jobs. Employer contributions are mandatory, while employees are not necessarily required to contribute to the plan.[5] Early withdrawals from the plan are permitted, but they may be subject to a penalty.[6]