Salary-Reduction Contribution

Salary-Reduction Contribution

A contribution to an employer-sponsored plan whereby the employee does not receive a check for his/her entire salary. Rather, the employer puts a portion of the salary into the plan directly; the contribution is automatically invested for the employee's retirement. A salary reduction contribution may come before or after the employee's taxes. This determines whether or not the withdrawals after retirement are taxable. See also: IRA, 401(k).
References in periodicals archive ?
This allows employees to elect to make salary-reduction contributions.
Employees can't make salary-reduction contributions
Thus, to the extent that retiree benefits are funded, contributions must be employer contributions, not salary-reduction contributions.
2002-41, an employer sponsored an HRA paid for solely by the employer, not through salary-reduction contributions.
401(k) plan) can continue to make salary-reduction contributions, regardless of age.
403(b) plan: If an employer is unable to fund a retirement benefit for its employees, it could provide a plan that accepts pretax, employee salary-reduction contributions.
The employer deposits employees' voluntary salary-reduction contributions to a Sec.
In the ruling, an employer designed its health plans so that an employee paid all or a portion of the health insurance premium through pre-tax salary-reduction contributions.