Editing Pension (section)

===Examples===
In the United States, the legal definition of a defined contribution plan is a plan providing for an individual account for each participant, and for benefits based solely on the amount contributed to the account, plus or minus income, gains, expenses and losses allocated to the account (see {{uscsub|26|414|i}}). Examples of defined contribution plans in the United States include [[individual retirement account]]s (IRAs) and [[401(k)|401(k) plans]]. In such plans, the employee is responsible, to one degree or another, for selecting the types of [[investment]]s toward which the funds in the retirement plan are allocated. This may range from choosing one of a small number of pre-determined [[mutual fund]]s to selecting individual [[capital stock|stock]]s or other financial assets. Most self-directed retirement plans are characterized by certain [[tax advantage]]s, and some provide for a portion of the employee's contributions to be matched by the employer. In exchange, the funds in such plans may not be withdrawn by the investor prior to reaching a certain age—typically the year the employee reaches 59.5 years old (with a small number of exceptions)—without incurring a substantial penalty.

Advocates of defined contribution plans point out that each employee has the ability to tailor the investment portfolio to his or her individual needs and financial situation, including the choice of how much to contribute, if anything at all. However, others state that these apparent advantages could also hinder some workers who might not possess the financial savvy to choose the correct investment vehicles or have the discipline to voluntarily contribute money to retirement accounts.

In the US, defined contribution plans are subject to [[Internal Revenue Service|IRS]] limits on how much can be contributed, known as the section 415 limit. In 2009, the total deferral amount, including employee contribution plus employer contribution, was limited to $49,000 or 100% of compensation, whichever is less. The employee-only limit in 2009 was $16,500 with a $5,500 catch-up. These numbers usually increase each year and are indexed to compensate for the effects of inflation. For 2015, the limits were raised to $53,000 and $18,000,<ref>{{Cite web|url=https://www.irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations;-Taxpayers-May-Contribute-up-to-$18,000-to-their-401(k)-plans-in-2015|title=IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) plans in 2015}}</ref> respectively.

Examples of defined contribution pension schemes in other countries are, the UK's personal pensions and proposed [[National Employment Savings Trust]] (NEST), Germany's Riester plans, Australia's Superannuation system and New Zealand's KiwiSaver scheme. Individual pension savings plans also exist in Austria, Czech Republic, Denmark, Greece, Finland, Ireland, Netherlands, Slovenia and Spain.<ref>{{cite book |author1=((Economic Policy Committee)) |name-list-style=and |author2=((European Commission)) |title=The impact of ageing on public expenditure |year=2006 |publisher=EU}}{{full citation needed|date=April 2023|reason=If this is really a book, the ISBN would be nice.}}</ref>