Salary Deferral Plans
Salary Deferral Plans permit employees to voluntarily reduce their wages and the employer is obligated to forward that reduction to the Plan.  There are two types of salary deferral plans, the selection dependent on the number of employees of the sponsor, the individuals maximum desired contribution and the sponsor's desire to provide additional benefits.
Employee contributions are exempt from Federal and State Income Tax, but are still subject to Social Security and Medicare Taxes.