MBCarey Posted July 8, 2003 Posted July 8, 2003 I should know this.. But I am doubting my own knowledge and can't find it in writing anywhere. Do participants who were no employed as of 12/31 have to receive a TH Contribution?
Blinky the 3-eyed Fish Posted July 8, 2003 Posted July 8, 2003 It depends on what type of plan to which you are referring. The minimum requirement for a non-key participant in a DB plan is to accrue the top heavy minimum upon working 1,000 hours in a plan year. The minimum requirement for a non-key participant in a DC plan to accrue the top heavy minimum is to be employed on the last day of the plan year. Of course, your document could have more lax rules, so always check it. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
MBCarey Posted July 8, 2003 Author Posted July 8, 2003 Thanks Blinky. This is a DC plan. Also, Can you give me some simple guidelines in determining who is a key employee. It is not always those who are HC only by virtue of compensation is it?
R. Butler Posted July 8, 2003 Posted July 8, 2003 Key employee: 1. More than 5% owner 2. More than 1% owner with comp. greater than $150,000 3. An officer with comp. greater than $130,000
Tom Poje Posted July 8, 2003 Posted July 8, 2003 I would add the following caution: watch out for ees who were 'key' but don't meet these requirements. They are now former key, eligible for top heavy, but ignored completely for determining if plan is top heavy.
Blinky the 3-eyed Fish Posted July 8, 2003 Posted July 8, 2003 I would add another item to the key employee definition. Your plan could spell out the old rules for determining who is key, and if the EGTRRA amendment has not been adopted, then you will have 2 definitions of key employees. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
MBCarey Posted July 9, 2003 Author Posted July 9, 2003 We are looking back at the 1999, 2000 plan years. Yes, EGTRAA has been adopted. Would I still have to look at two definitions. I am not sure what the old document says.
R. Butler Posted July 9, 2003 Posted July 9, 2003 I just assumed we were talking about a post EGTRRA year. I need to quit doing that. You need to use the old definition of key employee. 1. More than 5% owner 2. More than 1% owner whose comp. exceeds $150,000 3. An officer having comp. in excess of 50% of the annual dollar limitation for DB plans in effect for the year. 4. One of the 10 largest owners having comp. in excess of the annual addition limit for the plan year.
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