Corrective amendment needed because one participant didn't contribute enough to make top-heavy minimum?

[Jilliandiz]

Ok here's the situation. I have a 401(k) Safe Harbor Matching Plan. There is a participant that only deferred 1.34% of comp. Therefore, they are not satisified by the Top Heavy Minimum required, b/c the match is 100% up to 3%, and 50% on the next 2%. Can I do a corrective amendment (11g?? What is that amendment called) for that plan year, stating what the participant would receive to pass T.H. ??, so I don't have to give everyone an additional profit sharing contribution?

[Archimage]

Is the safe harbor match the only contribution the employer makes to the plan? If so then you do not have to worry about it since it is deemed to pass top heavy.

If other contributions are made then you will have to provide the top heavy minimum. I don't think you will need a corrective amendment. Your document should prescribe how to deal with top heavy minimums.

[Jilliandiz]

They only want to make the safe harbor matching contributions, however the plan document also allows for discretionary profit sharing contributions. What now? Do I still pass top heavy, or do I have to give that participant the additional discretionary contribution to pass it???? And if so, can I do a corrective amendment just for that year?

[Archimage]

If they are only doing the safe harbor match then you are deemed to pass top heavy. Nothing else to do.