Nonelective Contribution

What is a 'Nonelective Contribution'

A nonelective contribution is 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.