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Employee Stock Ownership Plan (ESOP)

A type of employee benefit plan, defined under federal law, that gives employees ownership interest in the company.

Defined Contribution Plan

A retirement plan (like a 401(k)) where an employer, employee, or both make contributions to individual accounts. The final retirement benefit depends on contributions and investment performance.

Employee Retirement Income Security Act of 1974 (ERISA)

A federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Internal Revenue Code (IRC)

The body of tax law in the United States, administered by the Internal Revenue Service (IRS).

Annual Additions

The total amount of money contributed to a participant's defined contribution plan account in a year, including employer contributions, employee contributions, and forfeitures.

Forfeitures

Non-vested amounts in an employee's retirement account that are given up when an employee leaves the company before fully qualifying for them. These amounts are often reallocated to other plan participants.