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I am assuming that non-profit organizations have no individual owners. I have a possible new client the founder (HCE) of which has a daughter also working in the organization. The daughter does not and has not earned over $115,000 in any years, yet they are both treated as HCEs on the TPA's discrimination testing. Is the TPA somehow viewing the founder as an owner and then attributing that "ownership" to the daughter incorrectly? Thank you!

Hi, I have a non-profit who is wanting to make an non-elective contribution however they are funded by a grant which restricts them from paying bonuses from the grant money. I do not believe Non-Elective contributions are considered bonuses since there is no "achievement of objectives" associated with the contribution as the below grant language indicates. I also believe that Non-Elective contributions are benefits to employees which helps with employee retention. Does anybody have any good references that I can provide to the client so they can be more at peace with making the non-elective contributions? I have found the DOL's definition of a profit sharing plan and no where does it state bonus plan. Grant's Exclusion of Executive Compensation In setting or approving base compensation and benefits, the Board of Directors shall consider the market rate for the role and skill level of the individual to perform in the role as well as the notional projections included in the proposal submitted on behalf of Company A. Executive bonuses shall be awarded by Company A's management or the Board of Directors based on the achievement of objectives as set forth by management or the Board. However, no bonuses paid to Company A's executives will be funded from appropriated funds, but only from Program Income as defined by Circular A-110, e.g., membership fees to Company A.