Elective-Deferral Contribution

AAA

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.

RELATED TERMS
  1. Pension Plan

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

    A type of contribution an employer chooses to make to his or ...
  3. 401(k) Plan

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

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

    A company-sponsored retirement plan where employees may elect ...
  6. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
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 ... Read Full Answer >>
  2. 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 Full Answer >>
  3. 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 ... Read Full Answer >>
  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 ... Read Full 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 Full Answer >>
Related Articles
  1. 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.
  2. 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.
  3. 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.
  4. Professionals

    New 401(k) Pension Rollover Rule: Pros and Cons

    Is the new rule allowing participants to roll their 401(k) balances into pensions a good idea?
  5. Professionals

    Why Auto-Enrollment Will Save Your Retirement

    Savers need all the help they can get, even if it amounts to an offer they can't refuse. That's why the biggest improvement to 401(k)s is auto-enrollment.
  6. Professionals

    Retirement Planning Essentials for Your Clients

    You may have heard these retirement planning tips before, but has your client actually put them into action yet?
  7. Professionals

    Which Robo-Advisor is Right for You?

    Which robo-advisor is right for you? There are many factors to consider, including breadth of services, ease of use and cost.
  8. Investing Basics

    This Investment Strategy Could Be Your key To Success

    Goal-based investing seems like an obvious tactic. But many investors have only a vague idea what their goals are, much less how to achieve them.
  9. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience – and all the tax benefits you're due.
  10. Entrepreneurship

    10 Tax Benefits For The Self-Employed

    Running your own business has both personal and financial perks.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center