Balance for employee term in '94 still in top heavy test. How do I ma

[R. Butler]

An HCE terminates in '94. Balance is distributed in '98. My understanding of the top heavy rules is that an employee's account balance is excluded from the top heavy test if that employee has not performed services at any time during the 5 year ending on the determination date. I am running a 12/31/00 test, Quantech is including the distrib. in the top heavy test. How do I get it out of the the test (or should it be in the test and I just don't know the top heavy rules as well as I should)?

[david rigby]

I don't know the Quantech issues, but you are correct about the 5 years. For any participant who does not have a year of service within the last 5 years, you must exclude that person from the top-heavy test (whether or not paid out).

[pmacduff]

Can you change the employees coding in the Census info (Status/Service form) to "former key" or perhaps remove the "key" coding for that individual alltogether? I'm fairly new to Relius so I'm not sure that this will work, but if it doesn't effect anything else in the plan, I would try changing the coding.

[R. Butler]

The '98 report (the year of distribution) was done on Pentabs. We transferred the plan to Quantech beginning in '99, so I don't actually see the employee on Quantech. I just see the distrib. in the top heavy test.

[Guest Judy Miller]

I think you can just change that in the Top Heavy screen in plan specs.

[rcline46]

You have to remove it from the 98 distributions since there is no tie in to termination date. Make sure your distributions in Relius Top Heavy specs. are for the first year in which no service is performed regardless of when actually distributed

[R. Butler]

Thank you for all of the responses. I went ahead and did as Judy Miller & rcline46 suggest and just manually adjusted in the top heavy specs. I generally don't like to do it that way (I'd rather Quantech just do it correctly, so we have better cross checks), but I sometimes I guess we don't have a choice.