In order to obtain and retain qualified status, a pension or profit-sharing plan must not discriminate in favor of highly compensated employees which include:

Question

Quizplus · Accepted Answer

Highly compensated employees are defined as employees who own more than 5% of the corporation's stock or received compensation in excess of a certain amount (which is adjusted annually). The top 25% of employees based on compensation are not specifically designated as highly compensated employees for the purposes of qualified plan nondiscrimination testing. Therefore, the correct answer is A.

In Order to Obtain and Retain Qualified Status, a Pension