What is a voluntary contribution?
Voluntary contributions are understood to be the amount of resources that are deposited into a retirement plan. Often, these employee contributions are identified as the portion of a salary or wages that an employee chooses to place into the plan. Depending on the structure of the plan, the employer may match the contributions up to a specified amount, or may include an employer contribution that is based on other criteria. In general, the voluntary contribution is made on what is known as an after-tax basis. Essentially, this creates a situation where the employee can defer tax on any future earnings that may come about from the contributed amount. However, it is important to note that regulations regarding this construct of the voluntary contribution may not allow for this option. When that is the case, the voluntary contribution is understood to be a pre-tax contribution and will be subject to taxation when the employee begins to draw benefits from the retirement plan. The main func
