Top Heavy Test Question

[Guest richez]

A couple of quick questions regarding the TH test

1. I get to exclude unrelated rollover balances, correct?

2. Do I consider the balances of former employees? If so do I bring into the test all former employees or only those that terminated during the testing plan year.

I have a plan with balances of employees who seperated from service prior to the start of the testing plan year.

There were no distributions during the plan year.

[R. Butler]

1. Exclude unrelated tollovers

2. Exclude participants that did not perform services during the 12 month period ending on the determination date.

[Blinky the 3-eyed Fish]

Don't forget the outside chance you may have to run the testing under the old rules as well to avoid a possible 411(d)(6) cutback. If the plan is not top heavy under the rules R. Butler shares, post the plan year you are testing and when the EGTRRA amendment was adopted for your plan, so it can be determined if this is an issue.

[Guest richez]

I was wrong about distributions. There were distributions made during the year for participants who seperated from service during the year. Do I need to add these balances back?

[R. Butler]

There were distributions made during the year for participants who seperated from service during the year. Do I need to add these balances back?

Yes.

[stephen]

Also, don't forget to exclude the balances of former Key Employees.