Taxable cash benefits & 401(k) deferrals

[Guest ndgal]

If a 125 plan allows for a taxabe cash benefit, can it automatically be used as a 401(k) contribution? Or, must the 125 plan specifically state a 410(k) deferral option? What is the benefit of deferring a taxable cash benefit through a 125 plan? And, would compliance testing under the 401k plan become more cumbersome?