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Hardship Withdrawals makes plan Top Heavy


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Guest willwork4shoes
Posted

Hi!

I have a client who is ready to terminate his plan over top heavy!

At PYE 2003, we determined that the plan is now top heavy. Now down to 10 employees he's had 3 valid hardship terminations and and 3 employees stop making deferrals at all.

We figured that if the hardships had not been taken, they would not be top heavy.

Any suggestions?

********************* Side note********************

Is the Michael Preston on this message board, the same Michael B. Preston, EA, MAAA that I use to work with in Los Angeles? If so, guess who? :unsure:

Posted

I assume you mean hardship distribution and not hardship termination. All in-service distributions are added back to the participants' account balance within 5 years before the determination date in regards to top heavy. It sounds like your plan is not top heavy based on the information you have provided.

Posted
********************* Side note********************

Is the Michael Preston on this message board, the same Michael B. Preston, EA,  MAAA that I use to work with in Los Angeles?  If so, guess who?  :unsure:

Yup, that's me. No clue, as usual, though.

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