The demand for retirement planning solutions for highly-compensated employees will have spurred product development activity (64 percent).
But] the retirement readiness movement will present a challenge for highly-compensated employees for whom 401(k) plans and 409(A) non-qualified deferred compensation plans are imperfect solutions.
It ensures that highly-compensated employees can maximize their pre-tax contributions to the plan; and
And their failure to prepare for retirement can interfere with the retirement planning of the highly-compensated employees, called HCEs and defined as those who own at least 5 percent of the company or earn $115,000 or more in 2012.
Benefit caps: Group LTD plans typically have benefit caps based on more moderate income levels, which may limit the amount of income replacement more highly-compensated employees can receive.
To combat these misperceptions, carriers should provide education tools such as pre-enrollment communications and personalized enrollment kits or secure online enrollment tools to help highly-compensated employees understand their current income replacement and the necessity of IDI.
an endorsement employer-pay-all plan) for a select group of management or
highly-compensated employees is exempt from these requirements, except for the requirement that plan documents be provided to the Secretary of Labor upon request.
Highly-compensated employees are assumed to receive a large annual allocation, generally the maximum amount permitted under the Section 415 annual additions limit (the lesser of $49,000, as indexed for 2009, or 100% of compensation).
In order to be nondiscriminatory, a dependent care assistance plan (DCAP) may not discriminate in favor of highly-compensated employees (or their dependents) as to eligibility to participate or as to contributions or benefits and must satisfy a concentration test.
DCAPs satisfy the eligibility, contributions, and benefits tests if they do not discriminate in favor of highly-compensated employees or their dependents after excluding employees who have not attained age 21 and completed one year of service and certain union employees.
When discussing disability insurance, particularly as it refers to
highly-compensated employees and professionals, there appears to be a distinct lack of understanding of the mechanics of disability income insurance coverage.
