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Posted

A participant is entitled to an accrued benefit based on top heavy rules. They have 2 years of top heavy.

The participant now changes jobs and becomes an inactive participant but continues to work for the employer. It appears that under the top heavy regulations M-2 that they must receive additional top heavy years of credit as long as they get credit for a year of vesting. This is based on the reading in (b) that refers to 411(a)(4), (5) and (6).

Am I reading too much into this? (other than the fact they have not been updated for umpteen years). I do not see a way to not grant the additional years of top heavy credit.

Thanks in advance.

Posted

Not my read of M2 or M4.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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