401(a)

{{Short description|Tax-deferred retirement savings plan}}

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.{{cite web|url=https://www.law.cornell.edu/uscode/text/26/401-#a|title=26 U.S. Code § 401 - Qualified pension, profit-sharing, and stock bonus plans|publisher=Legal Information Institute, Cornell University Law School}} The 401(a) plan is established by an employer, and allows for contributions by the employer or both employer and employee.{{cite web|title=What Is 401(a) Retirement Plan?|url=https://finance.zacks.com/401a-retirement-plan-4786.html|website=Zacks.com|access-date=2021-04-25}} Contribution amounts, whether dollar-based or percentage-based, eligibility, and vesting schedule are all determined by the sponsoring employer.{{cite web|title=What Is a 401(a) Plan and How Does It Work?|url=https://www.thestreet.com/retirement/what-is-a-401a-plan-15068971|website=TheStreet.com|access-date=2021-04-25}}

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,{{cite web|title=The 401(a) Plans and Rollover Rules (what you need to know)|url=https://www.goodfinancialcents.com/401a-plans-rollover-rules/|website=GoodFinancialCents|date=23 May 2017|access-date=2021-04-25}} when changing jobs. Employer contributions are mandatory, while employees are not necessarily required to contribute to the plan.{{cite web|title=401(A) PLAN|url=https://retirementplanadvisors.com/individuals/401a/|website=RetirementPlanAdvisors|access-date=2021-04-25}} Early withdrawals from the plan are permitted, but they may be subject to a penalty.{{cite web|title=401(a) Plan|url=http://www.investopedia.com/terms/1/401a-plan.asp|website=Investopedia|access-date=2017-09-24}}