BG5150 Posted February 6, 2018 Share Posted February 6, 2018 Plan is 3% nonelective Safe Harbor plan. Only SH & deferrals. TH ratio is 80%. Is this plan exempt from Top Heavy? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
Belgarath Posted February 6, 2018 Share Posted February 6, 2018 "Exempt" is a word I don't like to use on this issue. If the plan meets all the requirements, it is "deemed" not to be top heavy. Probably just semantics, but even such a plan could be subject to top heavy if, for example, eligibility is different for deferrals and Safe Harbor contribution. P.S. - you may find Revenue Ruling 2004-13 helpful. https://www.irs.gov/pub/irs-irbs/irb04-07.pdf Link to comment Share on other sites More sharing options...
CuseFan Posted February 6, 2018 Share Posted February 6, 2018 does it matter? the 3% SH satisfies your TH minimum and is fully vested. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
Belgarath Posted February 6, 2018 Share Posted February 6, 2018 It might. Suppose the plan uses comp from date of participation - your 3% safe harbor won't satisfy top heavy if you became eligible for the SH mid-year. Link to comment Share on other sites More sharing options...
Bri Posted February 6, 2018 Share Posted February 6, 2018 That's one of the good results a "safe harbor contributions only" gets you, though. Only 3% of half the year's pay. Or a $0 match because the participant made no deferrals. (And yes, sure, there could be other circumstances that cause this not to hold, but if it's a single employer's only plan, and as "plain" as you're representing it, you should be good.) Link to comment Share on other sites More sharing options...
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