Nonelective Contribution

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Defined-Contribution Plan

    A retirement plan in which a certain amount or percentage of ...
  2. Salary Reduction Contribution

    A cash- or deferred-contribution arrangement of an employer-sponsored ...
  3. Simplified Employee Pension - SEP ...

    A retirement plan that an employer or self-employed individuals ...
  4. Pension Plan

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

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

    A company-sponsored retirement plan where employees may elect ...
RELATED FAQS
  1. Places where I can open an IRA Account?

    An individual retirement account can be opened through a range of major financial institutions, including brokerage firms ... Read Full Answer >>
  2. What does a merger or acquisition mean for the target company's employees?

    Suppose one sporting goods manufacturer merges with or acquires another sporting goods manufacturer. Before the merger and ... Read Full Answer >>
  3. What is the difference between CI (competitive intelligence) and competitive analysis?

    The difference between competitive intelligence and competitive analysis is that competitive intelligence refers to the understanding ... Read Full Answer >>
  4. Why is social responsibility important to a business?

    Social responsibility is important to a business because it demonstrates to both consumers and the media that the company ... Read Full Answer >>
  5. Why is it less than ideal for a CEO of a company to also hold the position of COO?

    When it comes to executive-level positions within an organization, assigned titles and the roles associated with each can ... Read Full Answer >>
  6. What rate of return should I expect on my 401(k)?

    An employer-sponsored retirement plan such as a 401(k) can be a valuable tool in accumulating savings for the long-term. ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  2. Investing News

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  3. Professionals

    Advisors: Don't Overlook Not-Yet-Rich Millennials

    Financial advisors looking to grow their practices should focus on potential high-net-worth millennials.
  4. Retirement

    Converting A Traditional IRA To A Roth

    When is it a good idea to convert traditional IRA funds into Roth IRA funds? And when does it not make sense?
  5. Professionals

    Your Clients and the Changing Retirement Landscape

    For many, retirement might not be the full stoppage of work and living a life of leisure but rather one of slowly phasing out of the workforce.
  6. Taxes

    How To Use Your IRA As A Last-Minute Tax Deduction

    While some people are stressing over their taxes, there is a big advantage to delaying the process: You can maximize your 2014 contributions to your IRA.
  7. Retirement

    Best IRA Accounts For Beginners

    Opening your first IRA should be just an early step in your ongoing financial education, for the more help you need, the higher fees you're likely to pay.
  8. Investing

    What Tech Companies Seeking Funding Must Overcome

    Tech companies face a unique set of challenges, including a need for timely responses to changes in technology and difficulty recruiting the right talent.
  9. Professionals

    Tips for Gen X Savers at Age 50

    This is the time to stop and take a careful assessment of where Gen X savers are and see what changes they need to make to achieve their financial goals.
  10. Economics

    Vietnam -- New Asian Hot Spot For Tech Investment

    Vietnam now has a rapidly expanding tech sector that's attracting investors from around the globe due to low business costs and highly skilled workers.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center