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Voluntary deductible employee contribution plan |
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Voluntary deductible employee contribution planA type of pension plan in which an employee elects to have regular payments deducted from each pay check.Similar MatchesFederal Insurance Contributions ActFederal Insurance Contributions ActIn the US, the federal law which directs employers to withhold a proportion of employees' salaries for payment to the government in order to provide future pension and other social security benefits. Defined contribution planDefined contribution planA pension plan whose sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: Defined benefit plan Additional voluntary contributionsAdditional voluntary contributionsAdditional payments to a tax deferred savings account or an occupational pension scheme by an employee to boost a pension at retirement. Free standing additional voluntary contributionsFree standing additional voluntary contributionsAn employee's pension scheme which is additional to but independent from his occupational pension scheme. The maximum amount which may currently be contributed to an employee's pension fund is 15% of salary (which includes benefits in kind) including his company scheme. For example if an employee is contributing 10% of his salary to a company scheme, a further 5% can be paid by that employee in each tax year into FSAVCs or AVCs. However, the employer and employee contributions when combined must not produce benefits in excess of Inland Revenue maximums. Excess contributionExcess contributionThe amount by which an IRA contribution exceeds the allowable limits. If an excess contribution is not properly corrected, a 6% IRS penalty applies. Further SuggestionsNondeductible contributionEqual percentage contribution rule (EPCoR) Contributions Agency Contribution money purchase scheme (defined contributions scheme) simplified defined contribution scheme Contribution defined contribution pension plan National Insurance (NI) Contributions Contribution margin General Average Contribution Deductible contribution Equity contribution agreement |
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