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Elective-Deferral Contribution

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Definition of 'Elective-Deferral Contribution'

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 Says

Investopedia explains 'Elective-Deferral Contribution'

When making these contributions, employees defer the tax on the money until it is distributed to them.

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    That information can be found in Internal Revenue Code Section 402(g). Also see IRS Publication 571.If an individual participates in multiple retirement plans, the aggregate salary deferral among ...

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