What are highly compensated employees

[Guest natasa]

I'm doing a research comparison between profit sharing and employee share ownership plans in US, EU and Slovenia. I'm currently writing chapter about profit sharing and employee share ownership shemes in US, so that I can compare them in the next chapters with countries in EU and my country - Slovenia. Since I'm not familiar with your laws and regulation my question may seem very unexperinced. Anyway I would like to know who is a highly compensated employe. I have a data back from 1996, that this is an employee which ows more than 5% of a company which finances a retirement plan, has earned more than 80.000 USD a year and is included in a group of 20% employees with the top earnings. I assume that this terms change every year, so what is the latest version?

Thank you for your help.

N.

[J Simmons]

Natasa,

The 80,000 USD is now, for 2007, up at 100,000 USD. It is subject to annual adjustment but only in $5,000 increments, to reflect changes in a cost of living index.

Whether an employee who earns more than 100,000 USD but is not in the top 20% paid by the employer is a highly compensated employee depends on whether the employer wanted that extra criteria in the plan design.

[Guest natasa]

Natasa,

The 80,000 USD is now, for 2007, up at 100,000 USD. It is subject to annual adjustment but only in $5,000 increments, to reflect changes in a cost of living index.

Whether an employee who earns more than 100,000 USD but is not in the top 20% paid by the employer is a highly compensated employee depends on whether the employer wanted that extra criteria in the plan design.

Thanks. Do you perhaps know where I could get fresh (from 2005, 2006 or 2007) statistical data about profit sharing and employee share ownership plans free on line I already wrote to PSCA for profit sharing plans and 401(k) plans and NCEO for employee share ownership, but all their surveys and researches are payable (cost quite a lot and I would probably have to wait to get a research to my address in Slovenia for a quite a long time) or for members only. I have only old data.

[J Simmons]

Here's a few websites you might check out:

http://www.bls.gov/ncs/ebs/home.htm

http://www.bc.edu/centers/crr/

http://www.pensionresearchcouncil.org/

http://www.ebri.org/ (This one charges a relatively minor fee for copies)

[Guest fender5150]

Here's another site for limit data on 401k plans. There's also some terminology that might help.

http://www.401ktest.com/pages/terminology.asp

[BG5150]

Don't forget: the dollar threshold for HCE's is for income in the PREVIOUS plan year, whereas the 5% (really more than 5%) threshold is for the PREVIOUS or CURRENT year.