On January 1, 2007, the Fund adopted a "safe harbor" definition of compensation that is recognized by the Internal Revenue Service as non-discriminatory. This definition (used by most pension plans) is to provide uniformity for all participants, and can be summarized as follows:


 

The amount that a YMCA would report in Box 1 of IRS Form W-2 ("wages, tips, other compensation") will be the starting point for determining a YMCA employee's compensation for plan purposes. Go to http://www.irs.gov/pub/irs-pdf/iw2w3.pdf for IRS Form W-2 Instructions.

In addition, the following amounts contributed under a salary reduction agreement must be included with the Box 1 amount to determine compensation for plan purposes:

1. Amounts contributed on a pre-tax basis via a Section 125 cafeteria plan under the Internal Revenue Code. These amounts include any reduction in an employee's compensation to pay for insurance, including medical, dental, group term life insurance, disability insurance, and accidental death and dismemberment insurance, under a Section 125 cafeteria plan. These amounts may also include pre-tax contributions under a Section 125 cafeteria plan, such as a Dependent Care Flexible Spending Account (FSA), a Health Care FSA, or a Health Savings Account (HSA).
2. Amounts contributed on a pre-tax basis to a Section 403(b) plan such as the Fund's Tax-Deferred Savings Plan, or to a 401(k) plan or Simplified Employee Pension plan sponsored by a YMCA.
3. Amounts contributed on a pre-tax basis to a qualified transportation fringe benefit plan (Section 132(f)(4) plan). These amounts used to pay for commuting and parking expenses.
4. Amounts contributed on a pre-tax basis to an eligible deferred compensation plan (Section 457(b) plan) sponsored by a YMCA.

 

1. Severance paid after termination of employment. Severance is payments made solely due to the termination of employment. It does not include vacation pay or other amounts the employee is entitled to on account of their YMCA employment.
2. Any amounts reimbursed by the YMCA for qualified moving expenses that are reported in Box 12 of IRS Form W-2. See IRS Publication 521 "Moving Expenses."
3. Non-taxable "fringe benefit" amounts, such as food and lodging, provided by a YMCA.
4. Compensation in excess of IRS limits. Read more information regarding the compensation limit.

 

If a YMCA provides an employee with a moving allowance that is includable in Box 1 of IRS Form W-2, it is included as compensation for plan purposes.

Reimbursements for qualified moving expenses reportable in Box 12 of IRS Form W-2 are not included as compensation for plan purposes. See IRS Publication 521 "Moving Expenses."
 

No. Employers have no discretion in determining plan compensation. A YMCA cannot choose to include amounts that are excluded from the definition. Similarly, a YMCA cannot disregard amounts that are included in the definition.