Top Heavy Min and Match

[Earl]

Hypothetical situation to make the question clear:

Top Heavy Plan has 100% match up to 3% of pay. All rank & file EEs defer 3% or more so the match satisfies their Top Heavy min.

There is one HCE (non-Key) who does not defer. He has to get a 3% Profit Sharing as a Top Heavy Min.

Does that then create a requirement to fund rank & file an additional Profit Sharing 3% since the 3% to HCE only would not pass coverage and non-discrimination on the Profit Sharing as a stand alone "piece"?

Thanks

[Tom Poje]

you have an HCE benefiting under the nonelective portion, and no NHCEs benefiting therefore you would fail coverage as well. so yes, you would have to provide a contribution to at least some of the nhces. I guess conceivably you could say plan fails coverage, therefore you could put in a corrective amendment and provide a contribution to a sufficent number of ees to pass all testing. depends on if you have other HCEs who deferred. (If I understand your question properly)

[austin3515]

Poje -

I thought you could treat people receiving the THM only as not benfitting?

[Tom Poje]

I thought that rule applied to nondiscrimination testing - it is found in 1.401(a)(4) not under coverage rules. - in other words, I thought the rule said you dont have to do nondiscrim testing if you could pass 410(b) if top heavy people were treated as not benefiting. But that doesn't say anything about coverage testing itself.

[Guest quinn the car fixer]

must plan give safe harbor match to get the th plan exemption under rev ruling 2004-13 ?

[R. Butler]

must plan give  safe harbor match to get the th plan exemption under rev ruling 2004-13 ?

Are you asking whether a safe harbor plan using the SHNEC gets a top-heavy pass? If so, then it depends on who you ask:

http://benefitslink.com/boards/index.php?showtopic=11000&hl=

The discussion on the specific question start about 5 or 6 replies down with himt4. I'm pretty sure if you searched you'd find other posts with the same analysis & the same people taking the same positions.