top heavy question

[Guest Julie Woulfe]

This Plan has a 7/30 year end. As of 7/30/01, the Plan is determined to be top heavy for the Plan Year ending 7/30/02. One of the Key EEs as of 7/30/01 is no longer key as of 7/30/02, because of the new definition (she is an officer with less than $130,000 in comp). In this Plan, key EEs do not get a share of the 3% Top Heavy contribution. For purposes of allocating the top heavy contribution for PYE 7/30/02, is this particular EE considered key or not key?

[actuarysmith]

IRC 416(i)(1) - The term "key employee" means an employee who, at any time during the plan year or any of the 4 preceding plan years, is- etc............

I think that you have a key employee on your hands.........

[kocak]

I agree. Your plan year begins 8/1/01 so pre-EGTRRA rules apply.

mck