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Question 289: Dutch Company owns 100% of U.S. subsidiary. U.S. subsidiary has a plan and excludes nonresident aliens. A Dutch national transfers to the U.S. subsidiary 1/1/06. An ERISA attorney says the definition of 415 compensation includes income regardless of nature or location, and thus this individual's compensation (in Euros) for 2005 will determine his HCE status for 2006. Correct? What about an individual with both U.S. dollars and Dutch Euro wages for a year? The plan defines compensation as Form W-2 compensation. |
Answer: I agree, and yes, it is awkward. Let me explain, with references to the 4th edition of my book, Who's the Employer?. (Subscribers can click to view online the text of these references.) |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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