Guest ROB VIDOVICH Posted April 9, 2003 Posted April 9, 2003 A COMPANY HAS A 401K PLAN WITH DEFERRALS AND AN ANNUAL 1% EMPLOYER PROFIT SHARING CONTRIBUTION TO ALL ELIGIBLE PARTICIPANTS. The plan is Top Heavy for 2002 based on the 2001 balances and the In-Service withdrawal for the Key Employee.. Also, the highest contribution percentage contributed by key employees is 3.77% (2.77% Deferrals and 1% Employer P/S Contribution). 1. With the new top heavy rules how long would the In-service distribution taken by the Key Employee in 2001 have to be included in the Top Heavy test 1 year look back or would the 5 year look back rule apply????? 2. Since every eligible participant will receive the annual 1% profit sharing contribution, would an additional 2% need to be contributed to non-key employees to meet the 3% top heavy minimum???
R. Butler Posted April 9, 2003 Posted April 9, 2003 1. Five year look back rule still applies to in-service distributions. 2. Yes. ( I assume no matching contributions are made based on your 3.77% calculation.)
Brian Gallagher Posted April 10, 2003 Posted April 10, 2003 I might be wrong, but I don't think the P/S contrib counts as a key empl. contribution. therefore i think the highest contrib would be 2.77% Remember: two wrongs don't make a right, but three rights make a left.
Blinky the 3-eyed Fish Posted April 10, 2003 Posted April 10, 2003 Why would you think that? "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
Brian Gallagher Posted April 10, 2003 Posted April 10, 2003 Yeah, I'm wrong. I guess I had one of my patented brain farts. Seems like I'm having a lot of those these days. Maybe I need a vacation. Remember: two wrongs don't make a right, but three rights make a left.
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