davef Posted December 17, 1999 Report Share Posted December 17, 1999 If a top-heavy defined contribution plan terminates prior to the end of the plan year, is the 3% top-heavy minimum contribution for the year of termination based on compensation for the entire year, or just the portion of the year prior to the termination date? The T-H regulations define compensation as either 415 comp or W-2, neither of which is prorated during the year of termination. Also, the IRS has stated (1995 EA Meeting) that compensation for the entire year is used if a person was a participant in a T-H plan at anytime during the year. Based on this, it seems like a full years's comp is to be used. Is this what others are doing? Link to comment Share on other sites More sharing options...
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