aggregating plans to determine top heavy post EGTRRA

[Guest Boilerburm]

We have a client that has two plans with different year ends. Top heavy testing aggregates those plans ending within the same calendar year. Under what rules would we test as of 2001 for 2002? The July 31 plan year ends 2001, so it doesn't seem logically to merit testing under the new rules. But the 401(k) plan ending 12/31/01 obviously is tested under the new rules. Any ideas?

[imchipbrown]

I may be wrong, but I think that you determine whether a plan is top-heavy for 2002 on 12/31/01. I also think you would use the old method (5 year look back, etc.) Don't quote me... I didn't look this up.

[Blinky the 3-eyed Fish]

Here is my two cents. When you test the calendar year plan for 2002, you are using the new top heavy rules. I don't think it matters what determination date you have, just the fact that the plan year in which you are testing began in 2002.

That being said, I think you would use the new rules for both the determination date of 12/31/01 and for the determination date of the other plan of 7/31/01.

Under the same logic, when you test for the 7/31/02 plan year, you would use the old rules for both determination dates.