Top Heavy Contribution to Frozen DC Plan

[chris]

E/er's MPPP contribution formula was amended to 0% of compensation, i.e., plan frozen in 2001. E/er also maintains a PSP. In reviewing plan doc's for GUST restatement the PSP document requires that a top heavy contribution be made to the e/er's MPPP if the e/er maintains one and the MPPP document mirrors that language. Was considering amending that language to the efffect that "... any such top heavy minimum contribution shall be made to e/er's PSP in any year that e/er's MPPP is frozen..." Reg. §1.416-1 T-5 wouldn't appear to help in this situation if the plan doc's actually mandate where the top heavy contribution goes. Any suggestions re proposed amendment? Thanks.

[Tom Poje]

here is a thought -

in the old days - at least a year or so ago, you still had to make contributions to a frozen DB plan if the plan was top heavy. if I recall, the comments in regards to a DC plan were simply, in the case of a dc, since the key ee is probably at 0 then no contribution would be necessary.

without diggin back through notes on frozen plans, it sounds like maybe you have to make a contribution to a frozen MP plan, to satisfy top heavy for the 2002!

[Mike Preston]

Chris, check the language of the plan very carefully. Usually TH minimum benefits are referred to "additional minimum benefits" required under certain circumstances. If the PSP provides for 3% or more, then the MPPP additional minimum benefits are, in fact, zero. But it depends on document language.