Top Heavy DB and DC under EGTRRA

[AndyH]

Client has DB and DC plans. DB freezes in 2002, presumably not requiring top heavy minimums.

Does the DC plan then need to satisfy the DC top heavy minimum, or both the DB and DC minumums?

Assume, for example, that the PS includes K deferrals for key employees exceeding 5%. Do non-keys need to get minimums of 3% or 5%?

[Guest merlin]

The 5% allocation is a safe harbor meant to satisfy the condition that the db minimum is generally the more valuable. Everyone I've talked to agrees that if there is no longer a db standard to be met post-EGTRRA, then a 3% minimum is all that is required. Not necessarily a good sample or authoritative, but it's the best I can do.

[AndyH]

Makes sense; thanks for the feedback.

Now a slightly different twist. Frozen DB (post-EGTRRA) and non-integrated profit sharing plan only. No contribution to the PS plan intended.

Presumably no contribution required to the PS plan on account of top heavy, right? Without the DB there would be none required, of course.

[Guest merlin]

Andy, I think the same reasoning applies,i.e. the db plan doesn't exist for purposes of granting a minimum (of course if it's still a part of the required agg. group you count the balances to see if the group is t/h). The dc minimum is 3% or the highest % allocated to a Key Ee if less. 0 allocation to the Keys = 0 minimum. It makes sense, but since when did that matter? Maybe some of the more intelligent life in the B/L universe can weigh in.