A plan that meets certain requirements that make it eligible for certain tax benefits.

Also known as a qualified trust pension or profit-sharing plan. These criteria include the requirements of the Internal Revenue Code Section 401(a) and the Employee Retirement Income Security Act (ERISA) of 1974. One such requirement is that the plan must be for the exclusive benefit of employees or their beneficiaries.

There are two types of qualified retirement plans, defined-benefit plans and defined-contribution plans. Defined contribution plans may include 401(k) plans, money-purchase pension plans, and profit-sharing plans, for example.

The tax benefits that these plans receive include the ability of employers to deduct annual allowable contributions to each participant, tax-deferral on contributions and earnings on those contributions until withdrawn by the participant, and still further deferral on some tax payments through a transfer into a different type of IRA.