Elective-Deferral Contribution

What Does Elective-Deferral Contribution Mean?
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".

Investopedia explains Elective-Deferral Contribution
When making these contributions, employees defer the tax on the money until it is distributed to them.

Filed Under: Retirement, Taxes

Related Terms

401(k) Plan
Active Participant Status
Defined Contribution Plan
Employee Contribution Plan
Matching Contribution
Non-Elective Contribution
Pension Plan
Salary Reduction Contribution
Savings Incentive Match Plan for Employees of Small Employers - SIMPLE
Simplified Employee Pension - SEP
More Related Terms

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