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. Matching Contribution

    A type of contribution an employer chooses to make to his or ...
  2. Pension Plan

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

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

    Active-participant status is a reference to an individual's participation ...
  5. Elective-Deferral Contribution

    A contribution arrangement of an employer-sponsored retirement ...
  6. Defined-Contribution Plan

    A retirement plan in which a certain amount or percentage of ...
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