Top heavy rules for 2002

[Guest leigh.lindsey]

Under the new top heavy rules effective for 2002, distributions are only counted for one year except for "in-service distributions". However, does anyone know whether these are true in-service distributions (after age 59 1/2) or if distributions due to ADP and/or ACP failure will be considered as "in-service distribitions"?

Thanks!

[John A]

Since I believe the actual language in EGTRRA is:

"any distribution made for a reason other than separation from service, death, or disability, subparagraph (A) shall be applied by substituting '5-year period' for '1-year period.;

I would say that corrective distributions for ADP, ACP and 402(g) are still included in top-heavy determinations on a 5-year period basis.

It is interesting that the language is "separation from service" rather than "termination of employment" given the changes to the "same desk rule."