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Employers establish qualified retirement plans to aid employees in saving money and receive tax benefits from contributions. These plans fall into two categories: defined benefit and defined contribution. Defined benefit plans, such as pensions, are funded and managed by the employer, providing a guaranteed payout to employees upon retirement. However, these plans are becoming less common. Defined contribution plans are more prevalent, funded by employee salary contributions with potential employer matching. In these plans, employees assume the investment risk, as payouts depend on investment performance. Both types of plans allow for tax-deferred contributions, reducing employees' taxable income.