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Are 3% SH plans exempt from Top Heavy


BG5150

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"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

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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.)

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