Salary reduction plan definitionQuestion What is a employee salary reduction plan arrangement?
Answer An employee salary reduction plan is designed to allow for pretax contributions to qualified plans as a result of reducing the employee’s compensation.
In general, salary reduction arrangements relate to 401(k) plans, 403(b) annuities, SARSEPs in existence before 1997, and SIMPLE plans. 
Brain Trust contributor:
Author of J.K. Lasser's Small Business Taxes 2007
Related Categories: Accounting, Finance, Taxes, Financial Planning, Human Resources, Retirement And Exit Strategies
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