Non-Contributory Retirement Plan

A non-contributory retirement plan is a type of employer-sponsored pension or retirement plan in which the employer pays the entire cost of plan contributions, and employees are not required to make any financial contributions from their own salary. Employees automatically receive plan benefits if they meet eligibility requirements, often after meeting vesting or service conditions. Non-contributory plans are typically defined benefit plans, such as pensions, where employers promise retirement income based on formulas that consider salary and years of service, and the employer is responsible for funding and managing the plan. This type of plan offers significant value to employees because it provides retirement benefits at no direct personal cost.