With respect to a plan for a given plan year, employee means an employee (within the meaning of section 1.410(b)-9) who benefits as an employee under the plan for the plan year (within the meaning of section 1.410(b)-3).
Employer is defined in section 1.410(b)-9.
With respect to a plan for a given plan year, former employee means a former employee (within the meaning of section 1.410(b)-9).
Former HCE means a highly compensated former employee as defined in section 1.410(b)-9.
Former NHCE means a former employee who is not a former HCE.
HCE means a highly compensated employee as defined in section 1.410(b)-9 who benefits under the plan for the plan year (within the meaning of section 1.410(b)-3).
NHCE means an employee who is not a HCE.
Nonexcludable employee means an employee within the meaning of section 1.410(b)-9, other than an excludable employee with respect to the plan as determined under section 1.410(b)-6. A nonexcludable employee may be either a highly or nonhighly compensated nonexcludable employee, depending on the nonexcludable employee's status under section 414(q).
Plan means a plan within the meaning of section 1.410(b)- 7(a) and (b), after application of the mandatory disaggregation rules of section 1.410(b)-7(c) and the permissive aggregation rules of section 1.410(b)-7(d).
Plan year is defined in section 1.410(b)-9.
Plan year compensation means section 414(s) compensation for the plan year determined by measuring section 414(s) compensation during one of the periods described in paragraphs (2) through (4) of this definition. Whichever period is selected must be applied uniformly to determine the plan year compensation of every employee.
This period consists of the plan year.
This period consists of a specified 12-month period ending with or within the plan year, such as the calendar year or the period for determining benefit accruals described in section 1.401(a)(4)-3(f)(6).
This period consists of the portion of the plan year during which the employee is a participant in the plan. This period may be used to determine plan year compensation for the plan year in which participation begins, the plan year in which participation ends, or both. This period may be used to determine plan year compensation when substituted for average annual compensation in section 1.401(a)(4)-3(e)(2)(ii)(A) only if the plan year is also the period for determining benefit accruals under the plan rather than another period as permitted under section 1.401(a)(4)-3(f)(6). Further, selection of this period must be made on a reasonably consistent basis from plan year to plan year in a manner that does not discriminate in favor of HCEs.
Notwithstanding the uniformity requirement of paragraph (1) of this definition, if employees' plan year compensation for a plan year is determined based on a 12-month period ending within the plan year under paragraph (3) of this definition, then the plan year compensation of any employees whose date of hire was less than 12 months before the end of that 12-month period must be determined uniformly based either on the plan year or on the employees' periods of participation during the plan year, as provided in paragraphs (2) and (4), respectively, of this definition.
Section 401(k) plan is defined in section 1.410(b)-9.
Section 401(l) plan is defined in section 1.410(b)-9.
Section 401(m) plan is defined in section 1.410(b)-9.
When used with reference to compensation for a plan year, 12-month period, or other specified period, section 414(s) compensation means compensation measured using an underlying definition that satisfies section 414(s) for the applicable plan year. Whether an underlying definition of compensation satisfies section 414(s) is determined on a year-by-year basis, based on the provisions of section 414(s) in effect for the applicable plan year and, if relevant, the employer's HCEs and NHCEs for that plan year. See section 1.414(s)-1(i) for transition rules for plan years beginning before the effective date applicable to the plan under section 1.401(a)(4)-13(a) or (b). For a plan year or 12-month period beginning before January 1, 1988, any underlying definition of compensation may be used to measure the amount of employees' compensation for purposes of this definition, provided that the definition was nondiscriminatory based on the facts and circumstances in existence for that plan year or for the plan year in which that 12-month period ends.
If an underlying definition of compensation must satisfy the nondiscrimination requirement in section 1.414(s)-1(d)(3) in order to satisfy section 414(s) for a plan year, any one of the following determination periods may be used to satisfy the nondiscrimination requirement --
(A) The plan year;
(B) The calendar year ending in the plan year; or
(C) The 12-month period ending in the plan year that is used to determine the underlying definition of compensation.
Notwithstanding the general rule in paragraph (2)(i) of this definition, if the period for measuring the underlying compensation is the portion of the plan year during which each employee is a participant in the plan (as provided in paragraph (4) of the definition of plan year compensation in this section), that period must be used as the determination period.
In the case of a section 401(l) plan or a plan that imputes permitted disparity in accordance with section 1.401(a)(4)-7, an underlying definition of compensation is not section 414(s) compensation if the definition results in significant under inclusion of compensation for employees.
If a defined benefit plan prorates benefit accruals
as permitted under section 411(b)(4)(B) by crediting less than full years of
participation, then compensation for a plan year, 12-month period, or other
specified period that is used to determine the amount of an employee's benefits
under the plan will not fail to be section 414(s) compensation, merely because
the amount of compensation for that period is adjusted to reflect the equivalent
of full-time compensation to the extent necessary to satisfy the requirements of
29 CFR 2530.204-2(d) (regarding double proration of service and compensation).
This adjustment is disregarded in determining whether the underlying definition
of compensation used satisfies the requirements of section
414(s). Thus, for example, if the underlying definition of compensation is
an alternative definition that must satisfy the nondiscrimination requirement of
section 1.414(s)-1(d)(3), in determining whether that requirement is satisfied
with regard to the underlying definition, the compensation included for any
employee is determined without any adjustment to reflect the equivalent of
full-time compensation required by 29 CFR 2530.204-2(d).