noncontributory plan

noncontributory plan,

n a method of payment for group insurance coverage in which the entire premium is paid by the employer or the union. Also referred to as
noncontributory program.
References in periodicals archive ?
The Retiree Health Care Plan is a noncontributory plan that provides health care insurance for City retirees.
The steps outlined in IRS Revenue Ruling 2004-55 can be used with employers that have a noncontributory plan and are willing to take on the minimal administrative work involved.
For example, under a noncontributory plan that covers salary only and replaces 60% of income to a $10,000 maximum monthly benefit, an executive earning $400,000 (including incentive compensation) would have an income replacement ratio of less than 30% due to the plan maximum and the incentive comp not being covered.
While this makes sense in respect of a contributory deferred compensation arrangement where amounts set aside for the benefit of an employee are also beyond reach of the employer's creditors, it does net follow that a contributory plan must be treated the same as a noncontributory plan.
Many employers are switching to this model, known as a contributory plan, rather than replacing a noncontributory plan with an employee-paid one.
Virginia and Wyoming converted noncontributory plans to ones that require employee contributions.
12 These noncontributory plans covered nearly 96 percent of employees working for companies that reported having a pension plan.
As shown in table 4, noncontributory plans were less likely to apply deductibles than contributory plans.
In noncontributory plans, premiums are fully financed by the employer.