Nonelective Contribution


DEFINITION of 'Nonelective Contribution'

A type of contribution an employer chooses to make to each of his or her eligible employee's employer-sponsored retirement plan. The contribution is not based on salary reduction contributions made by the employee.

BREAKING DOWN 'Nonelective Contribution'

Unlike a matching contribution, the employer makes a nonelective contribution regardless of whether or not the employee makes a salary reduction contribution to the plan.

  1. Defined-Contribution Plan

    A retirement plan in which a certain amount or percentage of ...
  2. Elective-Deferral Contribution

    A contribution arrangement of an employer-sponsored retirement ...
  3. Active Participant Status

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

    A type of retirement plan, usually tax exempt, wherein an employer ...
  5. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  6. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
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  1. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  2. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  3. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>
  4. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>
  5. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>
  6. Are catch-up contributions included in actual deferral percentage (ADP) testing?

    Though the Internal Revenue Service (IRS) carefully scrutinizes the contributions of highly compensated employees (HCEs) ... Read Full Answer >>

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