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hello this is chad sinclair with corby lets take a few moments to talk about a defined contribution plan that allows employers to make discretionary retirement contributions to their employees it is important to note that with the profit sharing plan employees themselves cannot contribute to the plan if a salary deferral feature is added the plan becomes a 401k plan employees can however have other retirement plans in place in addition to the profit sharing plan with this retirement account employers can make discretionary contributions to the retirement account of their employees employers can decide to make contributions even if the business isnt profitable or they can decide not to make contributions at all even in profitable years for self-employed individuals however they must be able to show net earnings from self-employment in a year in order to contribute to a plan on their own behalf the profit sharing plan is a good retirement option for any business but can be a great opt