Compensation in Top-Heavy PS Plan

[Guest notapensiongeek]

Good morning,

We have a top-heavy profit sharing plan that specifically excludes "compensation earned while in union pay status" for allocation purposes; however, since the plan is top-heavy, I believe that we must include this "excluded" compensation when calculating if each participant has received the 3% top-heavy minimum. Is this correct?

Thanks for your help!

[Nate X]

I'm assuming this is in reference to a participant who had both non-union and union* service during the plan year and the plan is not a multiemployer plan.

The participant would be considered both a union* and a non-union employee for plan purposes. Even if union* and non-union employees were allowed to participate in the same plan, the participant's service as a union employee* would be excluded from the top-heavy minimum. Union employees* are not subject to the top-heavy minimum.

*Subject to good faith bargaining between employee representatives and the employer.

[Guest notapensiongeek]

The Plan excludes union employees. The employee was a union employee for the first two months of the year then became non-union for the remainder of the year. I will disregard wages earned by this employee while a union employee for top-heavy minimum purposes.

Thanks for your help!!