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[Music] employers establish qualified retirement plans to help their employees save money qualified retirement plans are an integral part of retirement savings employers receive tax breaks from contributions they make for their employees and in some cases employees can defer part of their salaries to make contributions which reduce their taxable incomes as well there are two types of qualified retirement plans defined benefit and defined contribution a defined benefit plan is funded and managed by a company for its employees employees receive a guaranteed payout when they retire or begin taking withdrawals pensions are a good example though fewer and fewer firms are offering them defined contribution plans are more prevalent today they are funded by a portion of the employees salaries and many employers match these contributions note however that the employees bear the investment risk payouts depend on investment performance but again employee contributions reduce taxable income a 401