These are employee sponsored defined contribution retirement plans and are very popular.
The key elements are:
A participating employee has the option of receiving compensation in cash or having it contributed pre-tax to the plan.
An employee’s contribution is subject to an annual limit. For 2019, that annual limit is $19,000. This annual limit is for all 401(k) plans for the year.
An individual who will be 50 years of age by the end of a tax year may make additional “catch-up” contributions. The maximum catch-up contribution for 2019 is $6,000. Catch-up contributions may only be made if the plan permits this type of contribution.
Matching contributions made to a 401(k) plan by the employer are not treated as an employee’s elective and not subject to the annual limit.