Minimum Top Heavy allocation

[Guest h_nowicki]

A client has top heavy issues and makes only a safe harbor matching contribution (to those who are participating). Does this satisfy the minimum top heavy allocation?

The vesting schedule is accelerated enough.

[Tom Poje]

that should work (assuming there are no old forfeitures that are also getting reallocated.) In addition, plan cannot use otherwise excludable option.

I would add, if only HCEs are deferring, this gives an appearence that the safe harbor notice was not distributed properly. It might be in the best interests to have NHCEs sign off.

[Guest h_nowicki]

It doesn't matter that the safe harbor match is only given to those making deferrals? Do you know of a citing off-hand?

I am unclear as to whether or not all eligible NHCEs need to receive a 3% ctr... not just those making deferrals.

The entry requirements are 1 year and age 21 so OTE doesnt apply and the plan is small enough to get NHCE signature.

Thanks

[Tom Poje]

as long as all participants received the notice you are ok. it doesn't matter if only hces defer. that makes a good deaql for them. but that is why I would want some type of proof that the NHCEs are aware of the plan. just in case.

[Blinky the 3-eyed Fish]

Rev. Rul. 2004-13 is the cite you want. I will specify that the plan is not subject to TH because only the SH match (and no forfeitures) are being allocated.

[actuarysmith]

The safe harbor regs are very clear on this point= if the ONLY employer contribution to the plan are safe harbor matching contributions, then the top heavy minimum is deemed to be met. This is true even though a number of participants (non contributing) did not recieve an allocation