Top Heavy Testing - Do you include accrued 401(k) deferrals?

[Guest dyoder]

I have read several differing opinions as to whether the account balance on the determination date should include 401(k) deferrals. For example, if the determination date is December 31, 2004 and the plan's last payroll date is December 31 but the contribution is not made until January 5, 2005, are these deferrals included in the participants' December 31 account balances for testing purposes?

[jaemmons]

I've heard some use the timing of when 401k deferrals are technically plan assets, which is based on when the employer could have been reasonably expected to segregate them from corporate assets.

[Tom Poje]

Instead of 'heard' or 'read' why not go the regs

1.406-1 t-24

....(b) adjust for contributions due as of the determination date

the gray area comes in when it says 'don't include if plan not subject to minimum funding requirements', though I have only herad that used with not including profit sharing contributions - though at an ASPPA conference a few years ago the IRS said you include those as well.

I would hold things like deferrals are due as of the determination date, they have already been withheld, but simply haven't been deposited