A subset or type of Defined Contribution Plan, also know as a Cash or Deferred Arrangement (CODA). This type of plan allows participants to elect to defer a percentage of their pay to the plan. The employer may also make contributions under this type of plan normally in the form of profit sharing or matching contributions. The amount elected to be deferred from a participant’s pay will not be subject to Federal withholding taxes and many State’s taxes; however, Social Security taxes still apply.