UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: mwyattea Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Re: Max 401K under Pension reform? Date: 5/14/2001 2:09 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Actually this amendment is changing the definition of Key Employees under IRC 416; 401k deferral testing are governed by HCE definition (in many cases these groups are one and the same in small plans but not necessarily the case). So this amendment would have no impact.

Key Employee is part of Top Heavy rules under IRC 416, introduced by TEFRA back in 1982. Laws were designed to make sure that if plans provided at least 60% of benefits to key employees, then certain minimum contributions and vesting schedules would have to be met.

Highly Compensated Employee was introduced with Tax Reform Act of 1986; a completely separate definition used in nondiscrimination testing and ADP testing. Changes to key employee definition don't impact HCE definition.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement