Highly Compensated Employee

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Dictionary Says

Definition of 'Highly Compensated Employee'

For employer-sponsored, tax-advantaged retirement plan purposes, anyone who is a 5% owner of a company or who received more than $110,000 in compensation in 2010 (the compensation limit is adjusted annually). If the employer chooses, a highly compensated employee may also be defined as any employee whose pay is in the top 20% of compensation for that company.
Investopedia Says

Investopedia explains 'Highly Compensated Employee'

When a company contributes to a defined-benefit or defined-contribution plan for its employees and those contributions are based on the employee's compensation, the Internal Revenue Service wants the company to minimize the discrepancy between the retirement benefits received by highly compensated and lower compensated employees. If the difference is too great, the company can lose the tax deduction it gets for the retirement plan.
Search results for

'Highly Compensated Employee'

  • New Retirement Plan Limits For 2011

    http://www.investopedia.com/articles/retirement/04/111004.asp
    ... Key Employee definition, $160,000, $160,000. Highly compensated employee definition,
    $110,000, $110,000. Social Security Wage base, $106,800, $106,800. ...

  • Tax Credit For Plan Expenses Incurred By Small Businesses

    http://www.investopedia.com/articles/retirement/04/012104.asp
    ... benefit plans. The plan must cover at least one employee who is not classified
    as a highly compensated employee (HCE). An employer ...

  • What's the difference between a golden handshake and a golden ...

    http://www.investopedia.com/ask/answers/09/difference-between-golden-handshake-parachute.asp
    ... company and an employee that guarantees the employee certain benefits ... agreements
    concern investors because company executives are highly compensated already and ...

  • Series 65 Study Guide - Retirement Plans - ERISA Issues ...

    http://www.investopedia.com/exam-guide/series-65/retirement-plans/erisa-issues.asp
    ... must not benefit to a greater degree than non-highly compensated employees. Vesting -
    plan benefits may require a vesting period before the employee earns the ...

  • Voluntary 401(k) Contributions: A Thing Of The Past?

    http://www.investopedia.com/articles/retirement/09/automatic-401k-contributions.asp
    ... target-date funds that mature at a given employee's estimated retirement age. ... of
    working-class Americans, and increased benefits for the highly compensated. ...

  • 5 Lesser-Known Retirement And Benefit Plans

    http://www.investopedia.com/articles/retirement/5-lesser-known-retirement-plans.asp
    ... plans, these plans are designed solely for highly compensated or key employees,
    and provide a supplemental level of retirement benefits to the employee as long ...

  • Business Owners: A Guide To Qualified Retirement Plan Loans

    http://www.investopedia.com/articles/retirement/03/071603.asp
    ... 2. The loan for highly compensated employees is not greater than the loans made
    available ... Example 1 Employee A has a balance of $60,000 in ABC Company's 401(k ...

  • Series 66 Study Guide - Special Issues for Retirement Plans ...

    http://www.investopedia.com/exam-guide/series-66/retirement-plans/erisa-issues.asp
    ... participants must be treated equally under the plan, and highly compensated employees
    must ... benefits may require a vesting period before the employee earns the ...

  • The Pension Bill: A Wolf In Sheep's Clothing

    http://www.investopedia.com/articles/retirement/06/pensionbill2006.asp
    ... enrollment, which lets employers deduct 3% from an employee's paycheck and ... testing
    designed to restrict the contributions of highly-compensated employees. ...

  • Asset Distributions A Key Consideration For Retirees

    http://www.investopedia.com/articles/retirement/08/qualified-plan-distributions.asp
    ... 401(k) plans, simplified employee pension (SEP) plans, and employee stock ownership ...
    rate approach allows discrimination in favor of highly compensated employees ...

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