What does the term "CODA" generally refer to in retirement plans?

The term "CODA" in the context of retirement plans refers to a "Cash or Deferred Arrangement." This concept is central to understanding how certain employee benefit plans function, especially in relation to 401(k) plans.

In a Cash or Deferred Arrangement, employees are provided with the option to either receive their compensation in cash or defer a portion of it into a retirement savings account. This deferral helps employees save for retirement while potentially reducing their current taxable income. Contributions made to such plans are often matched by employers, creating an incentive for employees to participate and save for their future.

The other options do not accurately define "CODA" in the context of retirement plans. Contributions of depreciation assets relates to asset management and investment rather than retirement plan structures. Capital options for deferred accounts is not a standard term used in retirement planning. Compounded distributions of annuities involves the payouts from annuity products and does not pertain to the concept of deferral in employee retirement savings. Understanding "CODA" is crucial for grasping how employee contributions are structured within various retirement plans.