This type of defined contribution plan,also known as a CODA,permits only private sector or tax-exempt employers' employees to tax defer part of their compensation to the trust of a qualified plan.

Question

Quizplus · Accepted Answer

A CODA (Cash or Deferred Arrangement) is a type of 401(k) plan that allows private sector or tax-exempt employers' employees to defer part of their compensation to the trust of a qualified plan. Profit sharing plans may also have a CODA feature, but the question specifically states "only private sector or tax-exempt employers' employees", which rules out profit sharing plans that are available to all employees. Gain sharing plans and incentive plans are not retirement plans and do not involve tax deferral of compensation.

This Type of Defined Contribution Plan,also Known as a CODA,permits