A defined contribution plan is a plan which do not promise a particular or specific amount of benefit retirement. It involves the contribution of employee mostly and can also involve the employer. The Defined contribution plans is a percentage of compensation up to a certain amount in dollars. This contribution may be mandatory or discretionary based on the agreed plan type. The Contribution are mostly invested on behalf of the employee and all benefits are paid to the employee based on the contributions or earnings as well as losses. The employers are not responsible in making up for any losses on investment.