What counts towards making the 3% min TopHeavy contrib

[Guest SJPrince]

There are all kinds of contributions in a 401(k) plan... salary deferrals, matching, company optional, QNECs, voluntary after-tax, etc.

Which do I use or NOT use when determining a minimum contribution for the Non-keys in a Top Heavy plan? Ex. Do we count matching towards a non-key having 3% of compensation for his required top heavy contribution? What about the others?

Thanks.

[wmyer]

You can definitely count QNECs & profit-sharing. Matching can be a problem. Some plan documents won't allow matching to satisfy the minimum, so you'll have to look at the document. If the plan allows it, currently you can only use matching to satisfy the minimum if you don't use it towards the ACP test -- you can't double use the match. After EGTRRA, you can use match both towards the ACP and the top-heavy minimum.

Also, if we're talking Safe Harbor 401(k), the SHMAC can't be used towards the minimum currently but the SHNEC can. After EGTRRA, the SHMAC can be used towards the minimum, too.