top heavy when amending out of safe harbor

[Kimberly S]

We're having a disagreement about how a plan that terminates its safe harbor contribution mid year is treated for top heavy purposes. Some of my associates believe that because the plan was safe harbor on the determination date, the fact that they amend away the safe harbor during the year does not change their top heavy status during the year of the amendment. Others believe that although the balances are determined as of a date when the plan was safe harbor, once the amendment is effective, the top heavy exemption goes away immediately. We haven't been able to locate any authority to support either position.

Knowing that a gut feeling is not necessarily a reliable authority, I'm hoping someone here has something more definitive.

[Tom Poje]

Code section 406(g)(4)(H) says the term 'top -heavy plan' shall not include a plan which consists solely of

(i).....meeting requirements of a safe harbor plan (ok Tom paraphrased this bit)

since you did not meet these requirements, I'd say your plan must provide top-heavy in this case.