What is an 'Elective-Deferral Contribution'
An elective-deferral contribution is a contribution arrangement of an employer-sponsored retirement plan under which participants can choose to set aside part of their pretax compensation as a contribution to the plan.
Also known as "salary-deferral" or "salary-reduction contributions."
BREAKING DOWN 'Elective-Deferral Contribution'
When making these contributions, employees defer the tax on the money until it is distributed to them.