TH? SH 401(k) + NC + CB

[abanky]

Plan is definitely Top Heavy for 2006.

Both NC and CB have a 1 year eligibility rule for contributions and we are giving all active non-keys with over 500 hours, 5% between the two plans.

My question is this... the 401(k) enrollment is immediate with dual entry... so if a participant enters 7/1/06 and is eligible for deferrals, has over 500 hours, but is missing the one year for contributions... does he/she have to get the TH minimum?

[Tom Poje]

for top heavy in a dc plan, hours are not important. if you are there on the last day, you are due a top heavy. it does not matter whether you are eligible for the nonelective portion.

since these ees did not work 1 year, you could invoke the otherwise excludable option and test separately. in that case, that group would not need the gateway minimum. since those ees are not in the DB I believe they are only do 3% as well.

after that, unclear what is going on. you say they are getting 5% between NC and CB. I will assume by CB you mean Cash Balance. this implies a db/dc combo, so the gateway might mean more than 5%.

plus you can not say an ee received 2% in the cash balance and add that to a profit sharing of 3% and say the ee received a total of 5%. you would have to convert the cash balance % into an equivalent dc %.

[abanky]

Thank you Tom,

I see that now in the reg. that hours aren't a factor.

I was thinking just 3% otherwise noneligible.

I worded that wrong. I was am converting the cb to equivalent dc dollars.