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limiting compensation in a profit sharing plan


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Guest Elizabeth Gaskins
Posted

i have an integrated ps plan with 2 hce's and 1 nhce. the hce's want the same allocation although one of the made double what the other one made. is there any way to do this? i was thinking of limiting compensation or limiting the allocation amount to what the lowest paid hce would get....any ideas? also, what would the affect be on the nhce as she made more than the lowest paid hce? i appreciate any advice....

Posted

Your alternatives should work. Another method is to limit any HCE's allocation to $X or Y%, without limiting NHCEs.

Remember that you are permitted to discrminate against one or more HCE's.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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