Jeff V

I appreciate the responses guys. It seems I have nothing to worry about.

A 401(k) plan sponsor formerly had only key employees eligible to participate, so top heavy testing wasn't an issue. The plan included profit sharing contributions. Next year, a non-key employee will become eligible. To get out of top-heavy testing, they just want to cease profit sharing contributions, allowing only the elective deferrals and safe harbor NECs (safe harbor NEC provision for non-HCEs had already been adopted when the plan was first adopted, but was basically moot until now because there were no non-HCEs). Under IRC 416(g)(4)(H), is the plan considered exempt from top heavy testing? Going forward it "consists of" only the elective deferrals and the NEC, although it contains "old" profit sharing contributions made during the prior era.

I'd note that the IRS is now (more clearly) stating that 2% S-corporation shareholders are considered "partners in a partnership" for 5500EZ purposes: https://www.irs.gov/retirement-plans/file-your-one-participant-plans-electronically-using-form-5500-ez I wish we had that clarity on if they are considered such under 29 CFR 2510-3.3 for purposes of being exempt from Title I of ERISA. If such clarity exists for ERISA-exemption, let me know!