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Highly compensated employees are those employees who were paid more than $105,000 in the past year or own more than a 5 percent interest in the employer.
This usually will be limited to highly compensated employees because of the current wage cap.
414(q)(1)(B) limit used in the definition of a highly compensated employee increases from $95,000 to $100,000.
Highly compensated employees (those making $80,000 or more) will reap disproportionate pretax benefits from a plan unless adjustments are made.
This is particularly true for highly compensated employees.
DEFINITION OF HIGHLY COMPENSATED EMPLOYEE SIMPLIFIED The definition of "highly compensated employee" has been simplified so that it will be easier for plan administrators to determine which employees must be treated under rules applicable to this category of worker.
A nonqualified plan is for highly compensated employees.
THE TWIST The company's plan for highly compensated employees is a mirror of the qualified plan.