Profit Sharing Plans |
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A profit sharing plan is a type of defined contribution plan
The employer's contribution to a profit sharing plan is not
required to be fixed. The most common contribution formula in a
profit sharing plan is a discretionary formula under which the
employer determines each year how much to contribute. The total
employer contribution may range from 0% to 25% of eligible
compensation. Contributions are allocated based on each
participant's compensation
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