Nonelective Contribution

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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.

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