True or false: Excluding all fringe benefits from 414(s) compensation is considered a safe harbor exclusion.

In the context of qualified retirement plans, specifically 401(k) plans, fringe benefits can encompass a variety of non-cash compensation forms, such as health insurance premiums, gym memberships, or company cars. When considering "414(s) compensation," it's important to understand that this term refers to the compensation that is counted toward plan contributions and non-discrimination testing under section 414(s) of the Internal Revenue Code.

The assertion that excluding all fringe benefits from 414(s) compensation is a safe harbor exclusion is indeed true. Safe harbor provisions allow certain actions or exclusions to ensure that a retirement plan complies with specific regulatory requirements without the need for extensive tests or additional compliance burdens.

By excluding fringe benefits from the calculation of 414(s) compensation, employers can simplify their compliance efforts because it helps avoid potential complications that might arise from including such non-standard forms of payment. This exclusion is often viewed as a safeguard against non-discrimination issues, therefore permitting a more straightforward assessment of contributions and the determination of highly compensated employees (HCEs) versus non-highly compensated employees (NHCEs).

This makes the statement true, as the exclusion serves as a protective measure for employers aiming to maintain their retirement plans in compliance with IRS guidelines, thus affirming the