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. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
  2. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  3. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
  4. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  5. Nonelective Contribution

    A type of contribution an employer chooses to make to each of ...
  6. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
Related Articles
  1. Retirement

    SIMPLE IRA Contribution Limits in 2016

    Learn the SIMPLE IRA contribution limits for 2016, with a brief summary of how the plan works, including eligibility and contribution and distribution rules.
  2. Retirement

    3 Reasons To Use An Employer-Sponsored Retirement Plan

    If you aren't participating in your employer-sponsored retirement plan, you're missing out! Learn the benefits.
  3. Savings

    3 Common Excuses For Not Contributing To A Retirement Plan

    If you're not participating in your employer-sponsored retirement plan, there may be some easy solutions.
  4. Retirement

    A Closer Look At The Roth 401(k)

    Learn about the benefits and drawbacks of this new investment account and see if it's right for you.
  5. Retirement

    Is Vanguard Right for Your Retirement?

    If you’re thinking about placing your retirement assets with Vanguard, here’s what you need to know.
  6. Retirement

    The Best Robo-Advisors for Beginner Investors

    There are a handful of robo-advisors that may be a good fit if you're just starting out. Here's a peek at one with no fees and no minimum investment.
  7. Investing Basics

    Why the Fiduciary Rule is Good for All Investors

    The new fiduciary standard should help lower what middle- and lower-income investors pay, on average, to brokers for retirement planning advice.
  8. Retirement

    When a 401(k) Hardship Withdrawal Makes Sense

    If you've exhausted all other avenues, there are ways to withdraw funds before age 59½ – sometimes without the 10% penalty that's usually due.
  9. Products and Investments

    Why ETFs Will Eventually Trump Mutual Funds

    Exchange-traded funds are growing rapidly in popularity and may well overtake their traditional open-ended cousins at some point. Here's why.
  10. Your Practice

    The Impact of Fiduciary Rules on 401(k) Advisors

    The final version of the DOL’s fiduciary rule provides some relief for advisors who serve 401(k) plans.
RELATED FAQS
  1. Who offers 401(k) plans?

    Find out who can offer 401(k) retirement plans. Also discover how a 401(k) plan can benefit both business owners and their ... Read Answer >>
  2. Are Flexible Spending Account (FSA) contributions tax deductible?

    Discover if contributions to your Flexible Spending Account (FSA) are tax deductible. Learn how it can reduce your taxable ... Read Answer >>
  3. 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 ... Read Answer >>
  4. 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 ... Read Answer >>
  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 ... Read Answer >>
  6. 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 ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center