Voluntary Deferral Plan

Voluntary Deferral Plan

An employee retirement plan in which an employee may elect to place a portion of his/her wages or salary into an account. The money in this account is invested and distributed following retirement and the employee does not have to pay tax on this income until retirement. What distinguishes a voluntary deferral plan is the fact that it is not governed by the Employment Retirement Income Security Act. For that reason, the employer may choose which employees can participate in the voluntary deferral plan.
References in periodicals archive ?
Here's why I recommend that every voluntary deferral plan contain such a subsequent election provision, even though it sounds complicated:
First, the provision makes the ideal voluntary deferral plan better integrated and flexible.
For the sake of clarity, let's focus on just one of these new design opportunities: using the 409A "subsequent election" role in conjunction with voluntary deferral plans.
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