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Elective-Deferral Contribution
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Elective-Deferral Contribution
A contribution to an IRA or 401(k) made from an employee's pretax income. That is, an elective-deferral contribution is tax-deferred, meaning that the retirement account holder does not pay taxes on what goes into the account until he/she begins making withdrawals.


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Matching contributions means that the business matches the elective deferral contributions made by employees.
This problem is in particular noted with 401(k) plans in which the employees are 100% vested in elective deferral contributions but cannot access the funds without terminating employment.
As you may be aware, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) provided that individuals age 50 or over may make additional elective deferral contributions to retirement plans that permit elective deferrals- i.
 
 
 
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