Elective-Deferral Contribution

Elective-Deferral Contribution

A contribution arrangement of an employer-sponsored retirement plan under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan. Also known as "salary-deferral" or "salary-reduction contributions".

Notes:

When making these contributions, employees defer the tax on the money until it is distributed to them.

See also: 401(k), Active Participant Status, Defined Contribution Plan, Employee Contribution Plan, Matching Contribution, Non-Elective Contribution, Pension Plan, Salary Reduction Contribution, Simplified Employee Pension, Simple