In regard to employee contributions in a 401(k) plan, which options are available?

The correct choice highlights the various types of contributions that can be made to a 401(k) plan, which includes pre-tax deferral contributions, Roth deferral contributions, and rollover contributions.

Pre-tax deferral contributions allow employees to save for retirement by reducing their taxable income in the year they are made, thus deferring taxes until funds are withdrawn during retirement. This is a traditional method of saving for retirement, which many employees opt for.

Roth deferral contributions enable employees to invest after-tax dollars, which means they pay taxes upfront. The advantage here is that withdrawals in retirement, including any earnings on those contributions, can be tax-free, provided certain conditions are met.

Rollover contributions are typically funds transferred from another qualified retirement account. This allows employees to consolidate their retirement savings without incurring taxes or penalties, thus maintaining the tax-advantaged status of their retirement funds.

Together, these options provide employees with flexible choices for contributing to their retirement, aligning with their individual financial situations and tax strategies. Other options that only specify a limited form of contributions—like only pre-tax, only post-tax, or only employer contributions—do not encompass the full range of employee contribution options available in a 401(k) plan.