PLHart Posted January 27, 2021 Report Share Posted January 27, 2021 We have a new 401k/PSP plan with an effective date of 1/1/2020, but a special effective date of 11/1/2020 for 401k deferrals and safe harbor (3% non-elective) contribs (it was adopted late in the year), so the 401k & SH provisions were just effective for the last two months of the year (from adoption date forward). Note - the plan will be top-heavy. If the only contribs for the year are the two months of deferrals and the SH 3% will the plan be deemed to satisfy top-heavy minimum? Or will the employer need to top off all employees at 3% of comp for the entire year? We don't know if, as long as the 401k deferrals and SH 3% for 11/1-12/31 are the only plan contribs for the year, if the plan will be deemed to satisfy top-heavy minimums, or if they still need to do 3% top heavy min for entire year since overall the plan has a 1/1/2020 effective date. Our hope is that the entire year TH minimum would only be due only if the employer decided to add any additional profit sharing. IS this correct? Link to comment Share on other sites More sharing options...
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