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Showing results for tags 'Top-Heavy Exempt'.
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A small 401(k) plan is written to provide a safe harbor match. If the employer provides no profit sharing and no forfeitures are allocated (or they are allocated as ACP-free match), the plan is top-heavy exempt. Suppose the plan is also written to partially exclude one sales person who is a Non-Highly Compensated Employee (not an owner and makes under $115,000). They are only excluded from the deferral and match portion of the plan. The plan easily passes coverage by covering the other 8 NHCEs. The employer wants the sales person to still get profit sharing in the years that they actually make a profit sharing contribution. However, in the years where no profit sharing is contributed, is the plan still top-heavy exempt (assume no forfeitures)?
