This site may contain affiliate links. We may earn a commission if you sign up through our links. Content is for educational purposes only and is not financial, investment, tax, or legal advice. Consult a qualified professional before making financial decisions.

Back to Glossary

Nonelective Contribution

Contributions

An employer contribution made to all eligible employees' retirement accounts regardless of whether the employee makes their own deferral contributions. Safe Harbor 401(k) plans often use a 3% nonelective contribution to satisfy nondiscrimination requirements. This differs from matching contributions, which require employee participation to receive.

Related Terms