A 401(a) Plan allows you to save and invest money for retirement with tax benefits.

Contributions are made to an account in your name for the exclusive benefit of you and your beneficiaries. The value of the account is based on the contributions made and the investment performance over time. No taxes are due, including on earnings, until you make withdrawals.

You may participate in a 401(a) plan and a 457 deferred compensation plan. Both plans work together to help you build a secure retirement.


Contribution rules are generally determined by your employer. A common method combines employer and mandatory employee contributions.

Contributions you make are mandatory or voluntary. Mandatory contributions are generally pre-tax (picked-up), which reduces your current taxable income.

Voluntary contributions are after-tax, up to 25% of your compensation (an IRS limit for total contributions to the plan also applies – see below).

Contributions your employer makes are typically a fixed dollar or percentage amount, or a match of your contributions.

Your employer’s contributions may have a vesting schedule, which determines your “ownership” of those contributions and associated earnings and how much of your account may be paid to you when you separate from service. (You always fully own your contributions and associated earnings.)

IRS rules limit the total contributions made to your account, including both your employer’s and your contributions. See Contribution limits for the current calendar year.