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A 401(a) plan is a qualified employer-sponsored retirement plan authorized under Internal Revenue Code section 401(a), used most often by government agencies, public schools, and nonprofits. The employer sets contribution formulas and eligibility, and participation is frequently mandatory. Most are paired with a separate 403(b) or 457(b) plan for voluntary employee deferrals.
Section 401(a) is the umbrella provision that defines what makes a retirement plan qualified for favorable tax treatment, so technically every 401(k), profit sharing, and defined benefit plan is a 401(a) plan. In everyday usage, though, a 401(a) plan means an employer-funded money purchase or profit sharing arrangement sponsored by a public employer, university, or nonprofit, often paired with a 403(b) or 457(b) plan for voluntary employee deferrals.
The defining feature is employer control. The plan document sets who participates, how much the employer contributes, whether employees must contribute a fixed percentage as a condition of employment, and the vesting schedule for employer money. Mandatory employee contributions can be picked up by a governmental employer and treated as pre-tax employer contributions under section 414(h)(2), which is a meaningful tax difference from an ordinary after-tax deferral. Executives at these employers often add a 457(f) plan for supplemental benefits.
Contributions are subject to annual limits the IRS adjusts each year, and qualified plans must satisfy coverage and nondiscrimination rules, though governmental plans are exempt from several of them and from most of ERISA. A common point of confusion for employees is assuming they can change their contribution rate at will. In a mandatory 401(a) arrangement, the election is usually irrevocable once made at hire.
A 401(k) is a type of 401(a) plan built around voluntary employee deferrals. What people call a 401(a) plan is usually an employer-funded money purchase or profit sharing arrangement at a public employer, university, or nonprofit, where the employer sets the contribution formula and employee participation may be mandatory rather than elective.
Usually not. When participation and the contribution percentage are conditions of employment, the election is generally irrevocable once made at hire, and the employee cannot start, stop, or change the rate later. That is the single biggest source of employee confusion, so explain it clearly during onboarding.
Governmental plans are exempt from most of ERISA, including its reporting, disclosure, and fiduciary provisions, and they are also exempt from several nondiscrimination requirements that apply to private employers. They still have to follow the Internal Revenue Code rules for qualified plans, along with the state and local law that governs the sponsoring employer.