In-Service Distributions and Top Heavy Testing

[Guest LHart]

Under the new Top Heavy rules, if an active participant has an in-service/hardship distribution in a plan year prior to the determination year, but within the past four years, is that amount included or excluded for top heavy testing purposes?

Let me clarify - I'm asking because our software is including these amounts in our top heavy tests . . . and I was under the impression that any distributions prior to the determination year are not considered . . . are these amounts being included because these people are still active?

[Guest Bob K]

Distributions that are made while an employee is still active are counted for 5 years. 416(g)(3)(B).

Hope this helps.

Bob

[Guest TrustMe401k]

In service distributions are still subject to the "old" lookback rules. Looks liek the software is correct