key employee determination

[Guest ERIC STRAND]

Let's say we have a start-up 2001 calendar year Plan. Assume we have an officer that is earning around $90,000. I believe he would be a key employee for determining if they are top-heavy for the start-up year 2001. Wouldn't he then be a former key employee in determining if the Plan is top-heavy for 2002 under EGGTRA? The strange part is that we are looking at the same determination date, 12/31/01, and the same 2001 census data in determining his key employee status for both Plan year's top-heavy tests.

[Blinky the 3-eyed Fish]

I had recently been at a seminar where Sal Tripodi spoke and this exact question came up. The answer is that the person would be a former key employee and thus his balance would be excluded from the TH test.