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 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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RELATED FAQS
  1. I work for two companies. How much can I contribute to each company's SIMPLE IRA?

    It depends.If you work for two companies that are unrelated and unaffiliated, you can make salary deferral contributions ...
  2. I have a KSOP through my employer that I've invested 100% in company stock. I am ...

    In order to be sure of your options, it's best to check the summary plan description (SPD) for the plan. The options may ...
  3. Can I contribute to my company-sponsored 401(k) after the company's year-end but ...

    Unlike IRAs, where contributions can be made for the previous year up to April 15 of the current year, salary deferral contributions ...
  4. Where can I find information on multiple annual additions for someone employed by ...

    That information can be found in Internal Revenue Code Section 402(g). Also see IRS Publication 571.If an individual participates ...
  5. I have several jobs. Can I contribute the maximum to multiple employer retirement ...

    It depends. A question such as this requires detailed information in order to provide a helpful response. Here is a general ...
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