Final answer:
A defined-contribution retirement plan with employer matching is known as a 401(k) plan. These plans are tax-deferred and portable, allowing for a regular contribution from the employer, with employees often contributing as well.
Step-by-step explanation:
A defined-contribution retirement plan wherein employers often match the amount employees invest is known as a 401(k) plan. These plans are increasingly common as a substitute for traditional pensions and defined benefits retirement plans. The employer contributes a fixed amount to the worker's retirement account regularly. Employees can also contribute, and these contributions can be matched by the employer to some degree. The employee has the discretion to invest these funds in various investment vehicles. A key feature of 401(k) plans is their tax-deferred status, meaning that taxes on contributions and earnings are deferred until withdrawal. Moreover, these plans are portable, so employees can take their 401(k) with them if they change jobs, providing stability and continuity in their retirement savings.
401(k)s are distinct from other options such as Employee Stock Ownership Plans (ESOPs), stock options, cafeteria plans, and Employee Assistance Programs (EAPs). They are designed specifically to help employees save for retirement in a structured and tax-advantaged way.