Minimum Top Heavy Contribution Requirement on a Terminated Plan

[Guest pmayfie]

I have a plan that was deemed Top Heavy for the 2002 Plan Year and has requested to terminate their plan in Feb. 2002. Will they still be required to make their Top Heavy Contribution prior to distributing the plan assets?

Thanks

PM

[Tom Poje]

if the plan is not a 401(k) plan, the answer is easy - assuming the key ee received nothing, no top heavy is required.

if the plan is a 401k plan and any key ee deferred, then (personal opinion since there doesn't appear to be any guidelines) I would say you need to provide a minimum. you could argue that no one was employed on the last day of the year so no top heavy is needed, but one could easily argue you have a 'short' plan year and everyone was employed on the last day of the short year.