Leaderboard

Not sure I follow your comment about top heavy. Are you saying that none of the XYZ employees have EVER worked 1000 hours in a year, meaning they are all otherwise excludable and therefore don't have to receive a top heavy minimum contribution under SECURE 2.0 rules? If so, then I agree. However if any of them ever do work 1000 hours then they will have to receive a top heavy minimum because the DC plan does not consist SOLELY of deferrals+safe harbor, and therefore doesn't qualify for the top heavy exemption. If this is a concern that there might be XYZ people who work 1000 hours in the future, I'd recommend separating the 401(k)+safe harbor and the profit sharing into separate plans so that you can maintain the top heavy exemption. Anyhow, use $500k for your deduction limit calc. None of the XYZ employees are benefiting in the plan so you can't count their comp.

Re followups - we were late to the party for implementing electronic signature software. I'm not sure what the technical name is (that's for the systems wizards - I'm just a user). It is an Adobe system, and OMG, the time it saves! When you send the document to be signed and dated, you input the need=by date, and the follow-up frequency - once every week, for example. System does it for you, and sends you the signed and dated document once the client does it. I love it!

I would add one thing to C.B. Zeller's comment. To be deemed not top-heavy, the plan must consist solely of deferrals and safe harbor contribution AND the eligibility requirements for both deferrals and the safe harbor contribution must be the same.