contestada

beta corporation has 1,000 employees eligible to participate in the firm's pension plan, and 100 of these employees are considered highly compensated. all of the highly compensated employees are covered by the plan. what is the minimum number of the 900 non-highly compensated employees who must be covered by the plan in order for the plan to satisfy the ratio percentage test?

Respuesta :

varshamittal029

The minimum number of employees to be covered by the plan is 630.

An eligible pension plan must pass the ratio percentage test to qualify for preferential income-tax treatment. According to this criterion, the ratio of highly compensated employees covered by the plan to lower-paid employees covered by the plan must be at least 70%.

This test will be the most common method of passing the coverage testing, and it shows that at least 70% of the users are benefiting.

In the given question, out of 1000 employees, 100 of them are highly compensated and therefore for the remaining 900, the ratio-percentage test for their coverage will be,

                                               = 70% of 900 employees

                                               = 630 employees

Therefore, 630 employees, must be covered by the plan, so that it satisfies the ratio-percentage test.

Learn more about Ratio-Percentage Test here: https://brainly.com/question/14801224

#SPJ4

Otras preguntas