Which type of retirement plan can an employee initiate independently, even if another plan exists?

An Individual Retirement Account (IRA) is a retirement plan that an employee can set up on their own, regardless of whether their employer offers another retirement plan option. IRAs are designed to provide individuals with flexibility in saving for retirement, allowing contributions to be made outside of employer-sponsored plans. This is particularly advantageous for employees who want to enhance their retirement savings or for those who may not have access to a workplace retirement plan that meets their needs.

In contrast, defined benefit plans, 401(k) plans, and pension plans are typically structured around employer sponsorship. These plans are usually set up by the employer, who has specific obligations regarding contributions, benefits, and management. While employees can often contribute to a 401(k) if available, they cannot independently initiate it without employer involvement. Thus, the IRA stands out as the only option where an employee can take the initiative to save for retirement independently of their employer's offerings.