Guest Gordy Posted February 16, 2002 Posted February 16, 2002 Reference: CCh Pension Plan Guide paragraph 27,014 (ASPA Conference) question 28--Did the Service ever issue guidance on this and if so where?
Mike Preston Posted February 17, 2002 Posted February 17, 2002 I haven't seen any. However, I'm not sure I even understand why that question was asked. Seems pretty clear to me that if you have anything outside of k12 or m11, you are hosed. About the only thing I can think of is that the IRS is supposed to be kinder and gentler these days, so we are hoping for a "liberal" interpretation. If we get it, great. I certainly won't complain. But the language seems so clear to me that I will at least be a tad surprised.
Kirk Maldonado Posted February 18, 2002 Posted February 18, 2002 For those of us who don't have the CCH Pension Plan Guide, this thread is inscrutable. I take offense at that because I eschew obfuscation. Kirk Maldonado
Mike Preston Posted February 18, 2002 Posted February 18, 2002 Question 28. Presume a business maintains 1 plan that has a mix of 401(k) deferrals, matching contributions & profit sharing contributions. If in 2002, the only contributions are deferrals and a 4% (dollar for dollar) safe harbor match, would this plan be considered top-heavy if key employee balances exceed 60% of plan assets? i.e., does the presence of a profit sharing option preclude use of the new rule deeming safe harbor plans not top heavy? What if in addition to the above, previous forfeitures get reallocated? The thing that is throwing me is the exact wording of EGTRRA: "The term top-heavy shall not include a plan which consists SOLELY (emphasis added) of a CODA which meets the requiremts of 401(k)(12) & matching contributions with respect to which the requirements of 401(m)(11) are met." What exactly is meant by the word "SOLELY"? No other contributions in that plan year? No other contributions permitted? A: This is an issue that is not resolved. Look for guidance by the end of the year.
Kirk Maldonado Posted February 18, 2002 Posted February 18, 2002 Mike Preston: Thanks for the clarification. Kirk Maldonado
Guest Gordy Posted February 18, 2002 Posted February 18, 2002 Thanks, Mike, I appreciate our response. I also thought it was clear until I read the ASPA query. Sal Tripodi's ERIAS Views issue 22 seemed clear also. (For Kirk: go to www.cybERISA.com).
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