### Question
Can you define what eligible automatic contribution arrangement means?


### Answer
**Eligible automatic contribution arrangement** is defined as the following in *26 U.S.C. § 414*:

> an arrangement under an applicable employer plan—


(A) under which a participant may elect to have the employer make payments as contributions under the plan on behalf of the participant, or to the participant directly in cash,


(B) under which the participant is treated as having elected to have the employer make such contributions in an amount equal to a uniform percentage of compensation provided under the plan until the participant specifically elects not to have such contributions made (or specifically elects to have such contributions made at a different percentage), and


(C) which meets the requirements of paragraph (4)

#### Citation:
  - *26 U.S.C. § 414*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter D-Deferred Compensation, Etc. > PART I-PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. > Subpart B-Special Rules**

