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401(k) and 403(b) plans do not discriminate in favor of highly compensated employees ( If your life insurance discriminates in favor highly compensated employees according to Section 79 (for example, you offer three times salary as a benefit for your highly compensated employees and one times earnings for all other employees), you must impute income for the full value of the life insurance benefit for your highly compensated employees. This can be an unpleasant surprise to the owner and/or highly compensated employee if this was not communicated in advance. |
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