Top heavy under EGTRRA rules

[Guest Mike Kimball]

The new rules on top heavy tests for cal year plans say that we can use them for 12/31/01 determination dates. Let's say you have a terminee from 1999 who does not take distribution until the 2001 plan year. Terminee has 0 hours service in 2001. Is his account balance included in the top heavy fractions because it was a distribution during the 2001 plan year (1 year look back for distributions) OR is it excluded because of failure to work 1 hour in 2001 (exclusion of previously terminated with balances). I have opted to exclude it based on the lack of an hour in 2001. I'm curious if any others have a different interpretation and their thought process.

[Tom Poje]

I would exclude him. this is no different than under the old rules if an ee was gone 10 years and then took a distribution you don't all of a sudden start including the amount for another 5 years.