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

Retirement savings plans: better than ever for your employees and your business

Thus, to the extent that retiree benefits are funded, contributions must be employer contributions, not salary-reduction contributions.

Is a single-employer welfare benefit plan appropriate for a small business?

2002-41, an employer sponsored an HRA paid for solely by the employer, not through salary-reduction contributions.

HRAs for former employees

401(k) plan) can continue to make salary-reduction contributions, regardless of age.

New retirement savings incentive may be an opportunity for "retirees"

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.

Choosing between a Sec. 401(k) or 403(b) plan

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.