highest allocation rate for key employee

[Guest Suanne]

A 401k plan uses prior year testing. No NHCEs deferred in the prior year. The owner's daughter deferred in 2003. There were no other contributions to the plan, and the plan is top heavy. As the plan fails the ADP test, the HCE deferrals will be refunded as excess contributions. Are these excess contributions included in determining the highest allocation rate for any key employee? In other words, is a top heavy contribution required?

[Blinky the 3-eyed Fish]

Yes.