Retirement and Pension Consulting Services applies for asset management if any assets of the Client includes (1) pension or other employee benefit plan (including any 401(k) plan) governed by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); (2) tax-qualified retirement plan (including a Keogh plan) under Section 401(a) of the Internal Revenue Code, as amended (the “Code”), and not covered by ERISA; or (3) an individual retirement account (“IRA”) under Section 408 of the Code.

A defined contribution plan is a retirement plan in which an employee contributes, and the employer typically makes a matching contribution.  401(k) and 403(b) plans are two of the popular types of defined contribution plans.  Today, the defined contribution plans are most commonly in the United States because it costs less for the employers.

In contrast, a defined benefit plan is a pension, and the employer contributes to this plan with a promise to pay a specified monthly benefit at the employee’s retirement.  Employers fund the pension, and they hire a money manager, typically an investment advisor, to invest the plan’s assets.