What Is A 401 K Retirement Plan? 
A 401 K Retirement Plan is a qualified ERISA plan that allows employers to offer their W2 employees a salary reduction by pretax contribution . Employers offering a 401 -LRB- k -RRB- plan may also offer matching contributions to the plan participants . The earnings accrue on a tax-deferred basis , but are tax at ordinary income rates at distributions . Those distributions will also be included in the provisional income test for Social Security Benefit taxation . 