Guest ChopperPilot Posted March 2, 2005 Posted March 2, 2005 For a startup 401 plan effective 01-01-2005, are non-owner employees earning greater than $100,000 HCEs? Or would they first be considered HCEs for the 2006 Plan Year? Thanx.
K-t-F Posted March 2, 2005 Posted March 2, 2005 Only 5% owners are HCEs regardless of comp earned for the first year. Of course after the first year you now have a "look-back" year Its not easy being green
WDIK Posted March 2, 2005 Posted March 2, 2005 ChopperPilot: When you use the term startup, I'm not sure if you were referring only to the plan or to both the plan and the employer. If you are dealing with a new company that started 1/1/2005, then I agree with PATA. If the company was already in existence prior to starting the plan 1/1/2005, then you do have a look-back year on which to determine HCE's based on salary. ...but then again, What Do I Know?
K-t-F Posted March 2, 2005 Posted March 2, 2005 Good catch! Thinking outside the box. Its not easy being green
Guest ChopperPilot Posted March 2, 2005 Posted March 2, 2005 What if a Plan existed for several years and an employee crossed over the HCE compensation threshhold for the first time in 2004. Is that employee an HCE for 2004? I'm assuming the the answer is no for 2004 and yes for 2005. But, I learned a long time ago - don't assume. Thanx.
WDIK Posted March 2, 2005 Posted March 2, 2005 the answer is no for 2004 and yes for 2005 What you said...... ...but then again, What Do I Know?
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