Question about Highly Compensated Employees and 401(k) Contributions
April 12, 2009 7:21 PM Subscribe
Am I a Highly Compensated Employee (HCE) with regards to making 401(k) contributions?
Here's what I know:
* A Highly Compensated Employee (HCE) is limited in his or her contributions to a 401(k) program.
* According to this page, (and others) if I made over $105,000 in 2008, I would be considered an HCE in 2009.
* My company will automatically limit the contributions I can make if I earn more than the HCE limit from them.
Here's my situation:
Last year I switched jobs from Company A to Company B in February. At Company A I was earning about $80,000 a year, at Company B I make $110,000 a year (Go me!). Company B would automatically declare me an HCE if I earned over $105,000 from Company B last year. Because I switched mid-year, I earned about $100,000 from Company B last year. However, I received about $20,000 from Company A last year (including bonus and unpaid vacation time). So, my total income last year was $120,000.
My question then is whether I am an HCE based on my total annual salary from last year (across both employers) or am I not an HCE because my salary from my current employer is less than the limit?
Throwaway email account: mefi.hce@gmail.com
[Asking as Anonymous to avoid awkwardness with my MeFi coworkers]
Here's what I know:
* A Highly Compensated Employee (HCE) is limited in his or her contributions to a 401(k) program.
* According to this page, (and others) if I made over $105,000 in 2008, I would be considered an HCE in 2009.
* My company will automatically limit the contributions I can make if I earn more than the HCE limit from them.
Here's my situation:
Last year I switched jobs from Company A to Company B in February. At Company A I was earning about $80,000 a year, at Company B I make $110,000 a year (Go me!). Company B would automatically declare me an HCE if I earned over $105,000 from Company B last year. Because I switched mid-year, I earned about $100,000 from Company B last year. However, I received about $20,000 from Company A last year (including bonus and unpaid vacation time). So, my total income last year was $120,000.
My question then is whether I am an HCE based on my total annual salary from last year (across both employers) or am I not an HCE because my salary from my current employer is less than the limit?
Throwaway email account: mefi.hce@gmail.com
[Asking as Anonymous to avoid awkwardness with my MeFi coworkers]
This thread is closed to new comments.
posted by JimN2TAW at 9:19 PM on April 12, 2009