As Hank wrote, salary reduction is a pre-tax contribution to an employer-sponsored retirement plan (401(k), 403(b), SIMPLE IRA, etc.) that allows you to defer income. In contrast, salary deduction does not reduce your current income.
A salary deduction is a contribution to the retirement plan made by having the employer "deduct" the money from your paycheck. What isn't clear from the question is whether the employer is treating this as a "classic" (pre-Roth-era) after-tax contribution to the plan or a contribution to a "Roth Option" within the plan. See IRS's "Types of Employee Contributions" here.
The old-style after-tax contributions come out tax free (like Roth contributions), but their earnings are taxable (like traditional contributions). The good news is that a fairly new (2014) IRS rule makes it easier to roll over those pre-tax contributions (still not the earnings, though) into a Roth IRA. So once you leave the company, you can move the pre-tax money into a Roth making future earnings tax-free.
The Roth Option that's attached to an employer plan (401k, etc.) is still part of that plan and still has the same withdrawal restrictions as the pre-tax (salary reduction) money. It's not the same as a Roth IRA. As the IRS writes: "the same restrictions on withdrawals that apply to pre-tax elective contributions also apply to designated Roth contributions."
It is important to keep the vehicles straight: there are employer plans (401k, etc.) and IRAs. Roth is a modifier meaning "after tax, and earnings may be tax-free". There are Roth 401(k)s (and 403(b)s, etc.), and there are Roth IRAs. In employer plans, in addition to Roth option contributions there are "classic" after-tax contributions.
The total contributions you make to an employer plan via pre-tax and Roth Option moneys is limited to $18K (plus possible catch-up). This is independent of whatever you contribute to an IRA, which has its own limit.
The "classic" after-tax contributions are not restricted by this limit. They are subject to a total defined contribution limit (employer plus employee contributions) of $53,000.
In case I've been as clear as mud, here's M*'s writeup of pre-tax vs. Roth vs. after-tax:
Should You Make Aftertax Contributions to Your 401(k)?

FYI: I must say I didn’t see it coming. But yesterday brought a highly significant development in the campaign for greater transparency in asset management. Speaking at Prime Minister’s Question Time, David Cameron expressed concern that lack of understanding of the true costs of investing is “sapping people’s enthusiasm” for saving for retirement.
He was responding to a question by the Conservative MP Tom Tugendhat, who recently discovered that the total charges on his own investment portfolio were “more than 5% a year” as a proportion of his assets, or “about triple what I had originally calculated”.
Regards,
Ted
http://www.evidenceinvestor.co.uk/first-it-was-obama-now-cameron-speaks-out-on-fund-fees/

Is Schwab going to stop selling load funds from Franklin Templeton (e.g. TPINX) or Oppenheimer (e.g. OIGAX)? Of course not, even though these are not only load funds, but load classes - if you go to E*Trade, they'll gladly sell you the Templeton fund or the Oppenheimer fund with a load.
Schwab is only going to stop selling a share class if it can't negotiate a load waiver. This is hardly generosity on Schwab's part. It typically get 40 basis points per year for NTF shares sold, and (admittedly I haven't checked) less for load shares. If you're working with an adviser, the adviser gets the lion's share of the front load, so Schwab comes out on the short end of the stick by selling the funds with a load (as opposed to load-waived).
Schwab (unlike Fidelity) used to include TF funds as well as NTF funds in its select lists. It stopped that years ago - now it tries to drive investors to its most profitable share classes. I don't see a difference between this and the supposed conflict of interest that advisors have in selling load funds. Except that soon (at least for retirement accounts) advisors will be held to a fiduciary standard that Schwab can avoid.
Let's look at those load-waived classes. Why would I go to Schwab and buy a 12b-1 laden (dare I say loaded) share class when TGBAX can be purchased elsewhere, albeit with a TF? That higher ER is just skimming money from the fund to pay Schwab for shelf space.
On general principle, I for one don't see anything positive about being offered less choice. But it makes for great PR, and evokes the predictable hurrahs.

I'm a little late to this discussion, but here goes:
1. For domestic stocks, use a low-cost index fund/ETF as a core hold. Then, if you want to "explore", search for talented management (team) that runs a fairly concentrated portfolio for a reasonable cost. Another option would be to add a sector fund/ETF or something that does not mimic the index (maybe something like SPHD or something that emphasizes volatility or dividends, for example).
2. For international stocks, there is a lot more disparity, and indexing is not a clear winner, unless you don't want to take the time to research active funds. Fees may be a bit higher for actively-managed funds here, so pay attention to out-performance net of fees.
3. For bonds, understand that the past 10 years will not be repeated over the next 10 years. That being the case, fund expenses are even more critical.
4. If returns, in general, will be lower over the next few years (which some smart people believe), costs take on a bigger part of the screening process.
5. If you are buying actively-managed funds, remember the most important consideration is who runs the strategy and what their record is. You are not buying an index; you are hiring a manager. Do your homework, and do not skimp on this step.
6. In taxable accounts, remember the importance of tax efficiency. That means taxable distributions can sometimes be deadly. Use funds that tend to have these in your retirement accounts, where taxation is deferred.

http://fpafunds.com/docs/fund-announcements/2015-11-16-sor_press-release-final.pdf?sfvrsn=4
@BenWP Yup, graph out 1-yr returns and it kinda slaps ya in the face, doesn't it? Shades of FPA Perennial. Just a month respite, after butchering their shareholders on that one, Eric Ende said he'd had enough and was heading for the retirement hills, looks like they rolled up their sleeves and got to work on SOR. (see p.2 of above doc for what was intended by the Board of Directors when they authorized the share buyback; your hunch is correct)

Thanks to all for the excellent advice.
As a pure short-term trade, I bought AMLP on 2/18/16 merely because it gave me decent exposure to the MLP space and most importantly, it was very liquid.
I have purchased CEFs before, but I never was comfortable with the discount/premium issue, and felt that smarter investors would game me. And I don't have the time or expertise to carefully research individual MLPs. I really want one mutual fund/ETF/ETN to cover the MLP space.
So after reading THIS and THIS, I am leaning toward owning AMJ or EMLP in my retirement account. Between the two, I am leaning toward EMLP due to the risk metrics, although EMLP is not a pure MLP play.
Kevin

Wow! You're likely to get a plethora of widely different reactions. Sorry for the redundancy that follows. (I also require 20 minutes to change a light bulb.)
Premise: First, you need some sense of your goals, investing philosophy and the degree of risk you're willing to take.
Than you need a plan.*
Than you select funds that fit the plan.
-
To the heart of the question, here's what I look for:
- Below average fees
- Reputation of the house for integrity, consistency and client service
- A fund's long term performance with a proven track record extending back well over a decade. (I tend to focus on Lipper's category ratings.)
- I like larger funds. They've grown large for a reason. There should be some economics of scale. And the detrimental effects of hot money chasing short term performance and than leaving in droves is likely to be less.
- I also favor larger longer established houses thinking they can afford deeper research staffs.
* For what interest it may hold, here's one plan that might be suitable for a moderate-risk investor 20 years into retirement (like myself).
80% Buy and Hold: (1) 22-25% diversified income, (2) 22-25% balanced, (3) 30-35% hybrids (three uniquely different funds positioned somewhere between income and balanced on the risk spectrum), (4) 7-10% international bond funds, (5) 7-10% inflation-sensitive funds (like real estate and commodities).
20% Flexible Portfolio: Nominally, 50% cash / 50% equity. Since this portion is by definition flexible, the cash could range anywhere from 0% to 100%. Currently, I'm a bit overweight equities and tilted slightly towards an energy/NR fund where I still perceive some value.
I too have trouble limiting the number of funds. Goal is 12. Currently 14. :)

Here are two local links regarding Bernie Klawans:
Obituary: http://articles.philly.com/2011-12-22/news/30547045_1_mutual-fund-retirement-community-engineer
http://www.bizjournals.com/philadelphia/stories/2003/01/13/focus2.html

http://www.sec.gov/Archives/edgar/data/102681/000116204416001738/valley497201604.htm
497 1 valley497201604.htm
[valley497201604001.jpg]
Valley Forge Fund, Inc.
TICKER: VAFGX
Supplement dated April 20, 2016 to the Prospectus dated April 22, 2015
The Board of Directors of the Valley Forge Fund, Inc. (the "Fund"), has concluded that due to the relatively small size of the Fund, it is in the best interests of the Fund and its Shareholders that the Fund cease operations. The Board of Directors has chosen to close the Fund and redeem all remaining outstanding shares on May 27, 2016.
Effective as of the date of this Supplement, the Fund will no longer pursue its stated investment objective. The Fund will liquidate its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Any required distributions of income and capital gains will be distributed as soon as practicable to Shareholders. Shares of the Fund are not available for purchase.
Prior to May 27, 2016, you may redeem your shares, including any reinvested distributions, in accordance with the "How to Redeem Shares" section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, any redemption is subject to tax on any taxable gains. Please refer to the "Taxes" section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO MAY 27, 2016, WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE, AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1-800-869-1679.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated April 22, 2015, provide relevant information for all Shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated April 22, 2015, have been filed with the Securities and Exchange Commission, and are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1-866-869-1679.

Not all ownership information is contained in the SAI. Many SAIs list only the holders of 5% or more of a fund's total assets. Some show only board members' holdings, not the managers' holdings. There is no requirement for how each fund must show ownership. My M* data base has more fund manager ownership detail, but it, too, is woefully incomplete and inaccurate. Fund companies differ in how management teams must invest their company retirement plan dollars, their bonuses, etc. Some companies require all of these dollars be invested in funds the company runs, some are more specific. Alas, because of the inconsistent reporting of data, we always ask managers to provide this information to us. Most do it matter-of-factly. Those that don't, we remove from our screening. Another thing...new funds, young managers, etc. can present problems in terms of how to evaluate. We just try to verify as best we can.

If you own the fund in a taxable account and have a large, unrealized gain, maybe best to hold but watch. If in a retirement account, at least move to watch status with no additional purchases, or sell if you are so inclined. Keep in mind FPACX has underperformed its category in 2015 and 2016 YTD, not a long period. Performance itself is not problematic for me. The fund should not be compared to an S&P Index. Yeah, it was convenient for management to do this when their numbers looked good by comparison, but we never compared it to the index. The sudden change of comparable index by management, however, is troubling, especially when the selected index does not resemble the fund in any way.

@davidmoran
I hope your Selects did better than mine. I just played around a year or two with non-retirement money. Probably little gain or loss.
Memories! In '81 my joints didn't ache. And I could consume half a case or more and still function the next morning. :)

Since I hold both OAKBX and FPACX in retirement accounts I have been looking at replacements. I like GAVIX and FPURX . Any other suggestions from those of you that have sold or recommend selling?

Hi, Mona.
Because risk moderation is generally tax-inefficient and for some of the asset classes that interest me (Asia income, for example) there aren't any tax-efficient vehicles. You could try to invest in low-beta stocks and a low-turnover fund, but that's sort of working at the edges of risk reduction.
So I keep good records, absorb the tax hit now and might book a taxable loss (as in the case of Artisan Small Cap Value) when I eventually sell.
Cheers,
David

Hi David,
Thanks for the explanation and I understand the choices.
I too have been hurt by the likes of Artisan (ARTMX) in the past few years with a poor returns and a big tax bill (on the way for the same in 2016), so I have mostly gravitated to Index and muni bond funds in my non-retirement account.
I certainly am not saying ARTMX offers any risk moderation (just the opposite high SD) like SFGIX and MACSX, but I have become very shy about putting any more actively managed funds in my non-retirement account. And the dilemma is, my non-retirement account is larger than my retirement account. I fill up my retirement account with other tax-inefficient funds (PIMIX, DBLTX, MACSX, PTIAX, VWEAX and one or two others), but the point is I have less room and have become conscious of asset location.
So now in some ways I let the tax tail wag the dog, but I sleep better if I continue to build my non-retirement account with funds that are tax-efficient, with a low ER and give me market returns.
I have owned ARTMX since 2006 in my non-retirement account, reinvested dividends each year (except last year), and like you did with ARTVX, I just need to bring myself to cutting the cord and before the November capital gain distribution.
Best Regards,
Mona

In my case, I have positions in SFGIX, MACSX and MAINX in my non-retirement portfolio and FTEMX in my retirement one.
For what that's worth,
David

Hi David,
Why relatively tax-inefficient funds in your non-retirement portfolio?
Mona

I agree with the folks: there aren't many better options than Seafarer. You might imagine Mr. Foster's mantra as "safe and sane." If you wanted more of the same, you might consider DRESX, which offers hedged exposure to EM small caps, or FTEMX, which mixes EM stocks and bonds. If you wanted to go in the other direction and look for a (small!) position on the wild side, then I'd consider specialists in small companies, small countries and/or frontier economies.
In my case, I have positions in SFGIX, MACSX and MAINX in my non-retirement portfolio and FTEMX in my retirement one.
For what that's worth,
David

Ted, can they keep it up forever after they grow beyond bound with boomer retirement rollovers?

Agree that AF goes nuts with the # of share classes. However, they run pretty good funds with low recurring costs ... I hold several of them both in taxable and retirement accounts.
I'd like them even more if they nixed the 12(b)-1 fee and insane front end loads, though. If I knew then what I know now about OEFs, I'd probably not have bought them. But those front end costs are more than paid for now.

M*'s take (from the WSJ giving quotes on reactions to the final regs that I cited in another thread):
Scott Cooley: "“One of my fears was that people who had already had paid a commission on their retirement accounts would be moved into fee-based accounts and then have to pay 1% of assets a year after they had already paid a commission. [But the DOL has] “indicated that it would have to be in the best interest of the client to shift them to a fee-based account from a commission-based account. That’s unambiguously pro-consumer.”
https://www.google.com/search?q=Reactions+to+the+Labor+Department’s+Fiduciary+Rule&ie=utf-8&oe=utf-8 (top link for WSJ quotes)

FYI: (This is a follow-up article)
Brokerages will need to proceed carefully in their plans to shift many of their retirement savers to flat-fee investment accounts.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/04/11/wealth-adviser-daily-briefing-brokerages-need-to-tread-carefully-in-fee-push/