Elective-Deferral Contribution

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.

RELATED TERMS
  1. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  2. Savings Incentive Match Plan For ...

    A retirement plan that may be established by employers, including ...
  3. Additional Voluntary Contribution ...

    An extra allocation of funds to a retirement savings account ...
  4. Tax-Sheltered Annuity

    A type of annuity that allows an employee to make contributions ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt ...
  6. Agency Matching Contributions

    A benefit that federal government employees receive under the ...
Related Articles
  1. Retirement

    How To Save More For Your Retirement

    The Economic Growth and Tax Relief Reconciliation Act of 2001 made it easier to prepare for the future. Will you be ready?
  2. Retirement

    SIMPLE IRA Tutorial

    This comprehensive guide goes through what a SIMPLE IRA is, how to set one up, contribute to it and withdraw from it.
  3. Retirement

    SIMPLE IRAs: Introduction

    By Denise Appleby What Is a Savings Incentive Match Plan for Employees (SIMPLE) IRA?A SIMPLE IRA is a retirement plan that may be established by employers, including self-employed individuals ...
  4. Retirement

    401(k) Contribution Limits in 2016

    Find out what the contribution limits are for 401(k) retirement savings plans in 2016, including individual, employer and aggregate limits.
  5. Retirement

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  6. Retirement

    Why are 401(k) contributions limited?

    Find out why contributions to 401(k) retirement plans are limited, including what the current contribution limits are and how limits encourage participation.
  7. Retirement

    It’s Never Too Late to Contribute to Your 401(k)

    Find out why it is never the wrong time to start contributing to a 401(k), even in your late 30s, 40s or 50s; discover how to maximize your savings at any age.
  8. Retirement

    Can You Deduct Your IRA Contributions?

    We help you answer this important question, which is determined by whether you are considered an "active participant".
  9. Retirement

    SIMPLE IRA Vs SIMPLE 401(k) Plans

    See the differences that may cause an employer to choose one plan over the other.
  10. Financial Advisor

    The Deadline for Catch-Up Contributions: April 18

    Those who want to maximize their retirement plan contributions can still make a prior-year contribution for 2015. Don't miss the April 18th deadline.
RELATED FAQS
  1. If myself and my employer contribute $59,000 to my 401K in 2016 (I'm 52.), can I ...

  2. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  3. Why are IRA, Roth IRAs and 401(k) contributions limited?

    Find out why contributions to IRA, Roth IRA and 401(k) retirement savings plans are limited by the IRS, including what the ... Read Answer >>
  4. How do I report Simple IRA contributions on a W2?

    Learn how Savings Incentive Match for Employees, or SIMPLE IRA, contributions are reported for the participant on Form W2 ... Read Answer >>
  5. How can an entrepreneur save for retirement?

    Learn about the retirement savings plan options for entrepreneurs and small business owners, including administration and ... Read Answer >>
  6. Does my employer's matching contribution count towards the maximum I can contribute ...

    No, your employer’s contribution does not count toward your contribution to your 401(k) plan. In 2016, an employee can contribute ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center