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Chapter 3 Compensation - Internal Revenue Service

Chapter 3- Compensation Page 3-1 Compensation Chapter 3 Compensation By Christopher J. Connors, Michelle L. Owen, &Laura A. Schaefer Reviewers: Patricia F. Philips (Pittsburgh) & Mark C. Retta (Cincinnati) Internal Revenue Service TAX EXEMPT AND GOVERNMENT ENTITIES Overview Introduction Often when the word Compensation is spoken, a vision of dollar signs flash inside your head and a smile creeps onto your face. There are not many things that could create this effect with just a simple word. You would think that this word presents a simple idea, but just the opposite is true. The term Compensation plays a significant role in retirement plan development. The definition of Compensation in retirement plans could be the difference between getting a hundred dollars more in your employer contribution, allowing you to contribute more to your 401(k) arrangement, or increasing the opportunity for growth with your retirement funds.

Chapter 3- Compensation Page 3-4 Compensation Section 415 Compensation, Continued Incorporation by Reference When a plan uses a definition of compensation that is intended to satisfy

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