Noncontributory plan

A noncontributory plan is any pension plan or other type of benefit plan that is paid for entirely by the employer. Participants in the plan are not required to make any payments. Employers frequently set up life insurance noncontributory plans for their employees, though the total amount of coverage tends to be low. Noncontributory plans are most beneficial for low-income employees, who might not otherwise be able to afford the associated benefits.

Related Courses

Accounting for Retirement Benefits