What type of plan allows for annual contributions limited by inflation indexing?

The type of plan that allows for annual contributions limited by inflation indexing is a defined benefit plan. Defined benefit plans are retirement plans in which an employer guarantees a specified pension payment to employees based on factors such as salary history and duration of employment.

In these plans, the contribution limits may be influenced by inflation indexing to ensure that the benefits maintain their purchasing power over time. This characteristic of being tied to inflation is essential in providing employees with a reliable and adequate income during retirement, reflective of the cost of living increases.

In contrast, defined contribution plans involve contributions that are typically made based on employee and employer contributions, which can vary from year to year and are not necessarily adjusted for inflation in a systematic way. Other types of plans listed, such as emergency fund plans or pension savings plans, may not inherently involve systematic inflation indexing of contributions.