top heavy plan

[eilano]

A client has a PSP/401k plan. 30 employees: 5 are partners, 5 are non equity partners, 20 staff. Currently the plan excludes the 5 non equity partners (who are NOT HCEs) from the 401k and PSP contributions. They want to change the plan to allow the 5 non equity partners to do the Salary Deferral but still exclude them from the PSP.

The Plan is Top Heavy. Assuming all other testing is ok, will the 5 non equity (NHCEs) have to receive a top heavy minimum contribution?

[Nate X]

Yes, they are eligible for a top-heavy minimum if they are Non-Key Employees. HCE status is irrelevant.