DC & DB top heavy minimum benefit

[Guest RONNIE WASEL]

We are restating a 401k of an employer who also maintains a DB plan. We are using a Corbel Volume Submitter checklist to do so but have a question on one of the selections. Question #69 states the following:

"If DC & DB plans are maintained (whether or not terminated), which plan provides top heavy minimum benefit?

a. n/a

b. DC, with 5% minimum

c. DC, with 7 1/2% minimum

d. DB, with 2% minimum accrual

e. DC, with 3% minimum accrual

f. Provide full top heavy minimums to each plan

We've never amended a DC with a DB and don't deal with DB plans. There is a 1% chance that either plan will ever be top heavy and we just need some advice as to which selection from above we should go with.

Thanks,

Ronnie Wasel, CPA

[Blinky the 3-eyed Fish]

a. This would only be applicable if there were no DB plan

b. If you want the DC plan to provide the TH min, choose this.

c. This is an antiquated choice designed to "buyback" the fraction to help 415(e), which went bye bye long ago.

d. If you want the DB plan to provide the TH min, choose this.

e. Same a c.

f. If your client is really generous, choose this.

I replaced 417(e) with 415(e).

[mwyatt]

Just to clarify, this question on the checklist is actually a two-part: pre-2000 and post-1999, which deals with Bliinky's observation on the 1.25 415(e) buyback (which was rendered moot with the 2000 repeal of IRC 415(e)).