Salary Reduction Contribution

What Does Salary Reduction Contribution Mean?
A cash- or deferred-contribution arrangement of an employer-sponsored retirement plan, under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan.

Investopedia explains Salary Reduction Contribution
This kind of contribution is also called an elective-deferral contribution. Employees defer the tax on the money until it is distributed to them.

Related Terms

Active-Participant Status
Agency Automatic Contributions
Defined-Contribution Plan
Elective-Deferral Contribution
Employee Contribution Plan
Matching Contribution
Nonelective Contribution
Savings Incentive Match Plan for Employees of Small Employers - SIMPLE
Simplified Employee Pension
Thrift Savings Plan - TSP
More Related Terms

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