Compensation Taken into Account in Determining Contributions Clause Samples
The "Compensation Taken into Account in Determining Contributions" clause defines how an employee's compensation is calculated for the purpose of determining contributions to a retirement or benefit plan. Typically, this clause specifies which types of earnings—such as base salary, bonuses, commissions, or overtime—are included or excluded when calculating the amount an employer or employee must contribute. For example, only regular wages might be counted, while certain fringe benefits or reimbursements are excluded. The core function of this clause is to ensure consistency and clarity in contribution calculations, preventing disputes and ensuring compliance with plan rules and legal requirements.
Compensation Taken into Account in Determining Contributions. Compensation, as defined in Section 2.01(k), shall not include any amounts elected by the Employer with respect to such contributions in Subsection 1.05(a) or (b), as applicable, of the Adoption Agreement.
Compensation Taken into Account in Determining Contributions. In determining the amount or allocation of any contribution that is based on a percentage of Compensation, only Compensation paid to a Participant for services rendered to the Employer while employed as an Eligible Employee shall be taken into account. Except as otherwise specifically provided in this Article 5, for purposes of determining the amount and allocation of contributions under this Article 5, Compensation shall not include reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation, welfare benefits, and any items elected by the Employer with respect to such contributions in Subsection 1.05(a) or (b), as applicable, of the Adoption Agreement, but shall include amounts that are not includable in the gross income of the Participant under a salary reduction agreement by reason of the application of Code Section 125, 132(f)(4), 402(e)(3), 402(h), 403(b), or 457(b). If the initial Plan Year of a new plan consists of fewer than 12 months, calculated from the Effective Date listed in Subsection l.01(g)(l) of the Adoption Agreement through the end of such initial Plan Year, except as otherwise provided in this paragraph, Compensation for purposes of determining the amount and allocation of contributions under this Article 5 for such initial Plan Year shall include only Compensation for services during the period beginning on the Effective Date listed in Subsection 1.01(g)(l) of the Adoption Agreement and ending on the last day of the initial Plan Year. Notwithstanding the foregoing, if the Plan is a profit sharing plan, Compensation for purposes of determining the amount and allocation of non-safe harbor Nonelective Employer Contributions under this Article 5 for such initial Plan Year shall include Compensation for the full 12-consecutive-month period ending on the last day of the initial Plan Year.