Definition of Compensation

[Guest Tim Brown]

I have a 401(k) plan that excludes bonuses from the plan. There are roughly 75 participants, and just 1 HCE. The HCE and 8 of the NHCE's receive bonuses. On the surface, it looks as though this would not be discriminatory. However, the HCE has base compensation of more than $170,000 with bonuses of around $50,000. If you look at their inclusion percentage without regard to the $170,000 compensation limit, they would be fine. If you use the compensation limit, he is at 100%. The NHCE's are below 100% so I would see it as discriminatory. Any thoughts?

[Guest mo again]

See a recent thread on this subject at

http://www.benefitslink.com/boards/index.php?showtopic=6923