Final answer:
CODA stands for Cash or Deferred Arrangement, a feature in retirement plans allowing employees to defer compensation to their 401(k) or 403(b) before income taxes.
Step-by-step explanation:
The term CODA stands for Cash or Deferred Arrangement. It refers to a type of retirement plan feature that allows an employee to elect between receiving cash immediately or deferring a percentage of their compensation into the plan, often a 401(k) or 403(b), where it can grow tax-deferred until withdrawal. This is a common feature in many employer-sponsored retirement plans. These deferrals are made before income taxes are applied, which can lead to significant tax savings for the employee. The correct answer to the question is therefore option C. Cash or Deferred Arrangement.