Employer contributions are described as voluntary and employees can contribute in which plan?

• A. SIMPLE Plans
• B. 401(k) Plans
• C. 403(b) Plans
• D. SEP Plans

Answer: (C)

This item is about how contributions work in different tax-advantaged plans. In a 403(b) plan, employees can make pre-tax deferrals from their salary, and the employer may add contributions at their discretion. That fits the description of employer contributions being voluntary while employees also have the option to contribute.

SIMPLE plans require the employer to contribute (either matching or a non-elective contribution), so the employer’s involvement isn’t described as voluntary. SEP plans do not allow employee contributions at all, only employer contributions. While 401(k) plans also allow employee deferrals and discretionary employer contributions, the option given points to the 403(b) arrangement as the match for voluntary employer contributions alongside employee participation.