When you're in the defined contribution retirement plan, your employer makes a base contribution of 5% of your salary, not including bonuses, commissions, overtime, room and board and utilities.
If you also contribute, your employer may match your contributions. (Most employers match up to 4% of your salary.)
In 2007, you may contribute up to $15,500 if you are under age 50, and up to $45,000 if you are 50 or older. The combined total that you and your employer contribute may not exceed 100% of your salary or $44,000, whichever is less.
Your employer may also choose to increase both the base contribution and the match within the limits allowable by the IRS.
Employee contributions are deducted from your paycheck on a pre-tax basis. You may change the deduction as often as you want, or you may stop contributing altogether, if you choose.