Final answer:
A pension plan that credits profit to an employee's account for retirement is known as a defined contribution plan such as a 401(k) or 403(b), with regular employer contributions that are portable and tax-deferred, offering protection against inflation.
Step-by-step explanation:
A pension plan in which a certain amount of profit is credited to each employee's account, payable at retirement, termination, or death, is commonly known as a defined contribution plan. These plans, such as 401(k)s and 403(b)s, involve regular contributions from the employer to the worker's retirement account, which are often matched by employee contributions. The funds are typically invested in a variety of investment vehicles, are tax-deferred, and are portable when an employee changes jobs. Over time, these investments can generate real rates of return, helping to protect retirees from the inflation costs that can affect traditional pension plans.
In addition to these plans, there is also pension insurance provided by the Pension Benefit Guarantee Corporation, which ensures that employees receive at least some pension benefits in the event that a company is unable to fulfill its pension promises due to bankruptcy.