Question

For which reason does the IRS use the term "key employees"?

a. non-discrimination rules in retirement benefits
b. non-discrimination rules in health insurance
c. benefits top-heavy provisions in employer-sponsored qualified retirement plans
d. top-heavy provisions in employer-sponsored health insurance plans

Answer 1

Option C, top-heavy provisions in employer-sponsored qualified retirement plans, is the right answer.

Step-by-step explanation:

The Internal Revenue Service of the United States uses a terminology, Key employee, to signify a classification of employees while determining the conditional retirement plans sponsored by the organisation, which involves 401(a) established benefit plans and 401(k)s recognized as "top-heavy". In simple terms, weighted towards the highly compensated employees of a company.