Are ER paid settlements plan compensation?

[Lori Foresz]

Plan document defines compenation as W-2 comp less reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits.

Er agreed to make settlement payments to employees for off duty meals not provided from 1999-2002. Er has been told to report the settlement payments on a 2004 W-2. Seems to me that this would then be treated as plan income.

Does anyone have any thoughts on this? Experience? Any help is greatly appreicated. Thanks

[GBurns]

What will it be reported on the W2 as being? Not because it is reported on a W2 means that it is income.

If the calculation of compensation is Wages etc less reimbursements and fringe benefits, that would mean that it this amount is reported on the W2 as either a reimbursement of as a fringe benefit it would not be counted as compensation, would it?

[mbozek]

Any amounts paid to a participant in the year which meet the plan definition of comp are counted for determining benefit accrual since individuals are cash basis taxpayers. Need to determine if payments for off duty meals would be considered within the excluson for reimbursements or was part of employees comp. that was required under contractual arangement ( e.g. collective bargaining agreement) but not paid.