Which of the following must be determined using 415 compensation?

The correct answer focuses on how Highly Compensated Employees (HCEs) and key employees are identified, which directly involves the use of 415 compensation. Under Internal Revenue Code Section 415, compensation is defined for the purpose of determining contribution limits and benefits within qualified retirement plans.

This determination is crucial as it ensures compliance with nondiscrimination requirements, which prevent plans from favoring highly compensated employees over others. By using 415 compensation to identify HCEs and key employees, plan sponsors can effectively evaluate whether their plan meets the necessary compliance standards and safeguard against issues that might arise from exceeding contribution limits for these employees.

In contrast, employee classifications, retirement plan eligibility, and salary adjustments may involve compensation but do not specifically require the application of 415 compensation. For example, while retirement plan eligibility can involve consideration of general compensation data, it does not rely on the specific definitions set forth under Section 415. Similarly, classifications and adjustments pertain to broader practices within human resources, rather than the specific regulatory framework governing retirement plan compliance.