salary reduction plan

salary reduction plan definition - business

salary reduction plan

A retirement plan that permits an employee to set aside a portion of salary in a tax-deferred investment account selected by the employer. Contributions and the income they earn are sheltered from taxes until the funds are withdrawn. Also called 401(k) plan. See also Roth 401(k).

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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