LLC with a Sub-S election

[DMcGovern]

I have a 401(k) profit sharing plan and the sponsor is an LLC with a Sub-S election. Currently, the plan consists of the three members only, but they just hired a new employee.

For plan purposes, how is the member compensation handled? (i.e. like a Corporation or a Partnership)

Thanks for your help!

[Lou S.]

I'm not an expert on business entities but if they have a sub-S election I'm assuming that means they are taxed like a sub-S Corportaion. If that's the case i would assume that the memebers get 2 forms of income, their W-2 wages as an employee that are generally eligible for pension purpose and their pass through dividends as member/shareholder which are generally not eligible for pension purposes.