DC plan w/ both union and non-union participants - top heavy treatment

[Guest robin s vatalaro]

I am working w/ a plan that recently converted a division's employees to collectively bargained union status. Apparently the group was given the option to be covered under a plan for collectively bargained people but opted not to do that. Instead, this group continues to participate in the employer's DC 401(k) plan. I believe I have to test ADP twice - once for the union group and once for everyone else who is eligible.

Do I have to test separately for top heavy? I have read IRC 416 and the regs and cannot find anything on this issue. Does the silence in the regs mean I just test for top heavy as I always have (one group)? I am concerned because of the req't to split the groups for ADP. This group as a whole is close to top heavy - if I have to break off the union balances onto their own test, likely the other group's key balances would exceed 60%.

Does anyone have any experience w/ this issue? Thank you.

[Guest Dook]

The rules of mandatory disaggregation that are applied to ADP/ACP testing do not apply to top heavy testing. The union group is treated as a separate plan for ADP/ACP testing purposes, and is deemed to pass the ACP test.