An employer will make contributions on the employees’ behalf to a 401(a) account established for each participating employee. The employer’s contributions to an employee’s account are based on a certain formula. This may include a match of the employee’s own contributions to the employer’s 457 or 403(b) plan, (401(k) for non-governmental employers), or in some cases, the employee’s contribution to the 401(a) plan (usually only for city and county governments if the employee contribution is mandatory).

The employer’s plan can also be established with a formula that offers employer contributions based on other criteria established by the employer within the design features available. Examples of incentive based contributions for governmental plans include longevity, attendance, performance, health/welfare goals and many others.