Top Heavy Minimum

[nancy]

If you have a frozen DB plan, is the top heavy requirement in the DC plan 3% or 5%?

[WDIK]

I think that the answer depends on whether or not the appropriate EGTRRA amendment was adopted for the defined benefit pension plan, so that no top-heavy benefits accrue under the frozen plan. If the amendment was adopted, I think that you can use the 3% top-heavy level in the defined contribution plan.

[Blinky the 3-eyed Fish]

It might be more complex than that. First, because EGTRRA does not offer 411(d)(6) protection, the EGTRRA amendment must be adopted before anyone earns the right to the accrual, which is 1,000 at a minimum to accrue the DB TH minimum, but utimately depends on the document provisions.

But, it also is possible that the DC plan has language that provides the 5% TH minimum even if the EGTRRA amendment was timely adopted in the DB plan.

[nancy]

A 2% top heavy minimum was provided in the DB plan through 2001. Effective 1/1/02 the mininum was changed to 2% offset by any contributions under the DC plan. The DB plan was subsequently frozen on 1/15/02. Assuming there are no 411(d)(6) issues, is the DC plan treated as a single plan since no one is benefitting under the DB and thus can give a 3% TH minimum?

[Blinky the 3-eyed Fish]

When was EGTRRA adopted in the DB plan?

What is the top heavy language in the DC plan if there also is a DB plan?

The answer to your question depends on the answers to these questions.