Defined Contribution

A defined contribution plan is an employer-sponsored retirement benefit in which the employer provides a retirement savings vehicle for its employees, and also typically makes a contribution to the employee's retirement account. In a DC plan, employees are responsible for managing their retirement assets, including their investment and withdrawal. The 401(k) plan is the most popular form of defined contribution plan, although states and local governments may sponsor other types of DC plans, such as 401(a), 403(b), and 457 plans.

On a statewide basis for broad employee groups (i.e., not including legislators, judges, etc.), four states and the District of Columbia provide only a defined contribution plan to their workers: all newly hired employees in Alaska since July 2006; new state employees in Michigan since March 1997, general employees (not public safety officers or teachers) in North Dakota since 2025, and in Oklahoma since November 2015; and general employees (not teachers or public safety workers) in the District of Columbia, have only a DC plan as their primary retirement benefit.

Employees in many states have access to a DC plan, as part of a hybrid retirement benefit (see Hybrid Plans below), as a supplemental retirement savings plan, or as an optional alternative to the DB plan.

States where broad employee groups may participate in a DC plan as their primary retirement benefit, on an optional basis, include Colorado, Florida, Indiana, Montana, Ohio and South Carolina.