EGTRRA and Top-Heavy

[smm]

EGTRRA changed the rules for determining when a plan is top-heavy. According to 2001-56, the new rules (definition of key employee, distributions, etc.) are analyzed on December 31, 2001 for a 2002 calendar year plan - the last day of the prior plan year. A new plan was adopted for 2001. Therefore, the determination date for the current plan year is also December 31, 2001 - the last day of the current plan year. It seems to me that you must apply 2 definitions and analyses to December 31, 2001 - one for the current year using the old rules and one for 2002, using the new rules. Has anyone heard anything to the contrary?

[rcline46]

You got it right. Always something in transition times.