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Employer 401(k) plan

An employer 401(k) plan is an employer-sponsored retirement savings plan that gives employees a choice of investment options—typically mutual funds. Employees who participate in a traditional 401(k) plan have a portion of their pre-tax salary invested directly in the option or options they choose. These contributions and any earnings from the 401(k) investments are not taxed until they are withdrawn.

In California, as in other states, an employer 401(k) plan is a retirement savings program that is sponsored by an employer and allows employees to save and invest for their retirement on a tax-deferred basis. Employees can choose to have a portion of their pre-tax salary invested in various investment options, often including a selection of mutual funds. The contributions made to a traditional 401(k) plan, along with any investment earnings, are not subject to federal or state income tax until the employee withdraws the money, typically after reaching retirement age. Under federal law, specifically the Employee Retirement Income Security Act (ERISA), these plans are regulated to protect the interests of participants. The state of California conforms to federal guidelines for 401(k) plans and does not impose additional state-level regulations on the structure of these plans. However, California employers must comply with state labor laws regarding payroll and employee benefits administration.

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Investments

Employer 401(k) plan

Individual & Family Legal Plan

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California State Code

California State Code

Investments

Employer 401(k) plan

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