Cash or Deferred Arrangement. A qualified plan, usually part of a profit sharing or stock bonus plan, that gives an employee the option to contribute some of his/her salary to the plan. One example is a 401(k) plan. A participant in a CODA may still contribute to an IRA, although the contribution might not be deductible.

Use CODA in a sentence

The coda was sufficient enough of a reward for the employee to strongly consider joining the law firm in New York.

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You should always make sure that your employees understand exactly what is in their coda so they can make the right decisions.

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It is wise to contribute to a CODA plan because of the tax benefits that such plans create for employees who do not withdraw their funds early.

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