Top-Paid Election Merger

[Guest m2b2]

When determining HCE(s) in a plan which had a merger using the top-paid group election they would have to consider both prior subgroups in this determination? These plans were both sponsored by the same company in the past.

Thank you!

[Guest Sieve]

"Top paid group" includes the top 20% of the employer's employees based on compensation. It is not based on participants in the plan or eligible employees, but on "emloyees" (with certain exceptions). See the rules in Treas. Reg. Section 1.414(q)-1, Q&A-9. So, all those in the top paid group will not necessarily be plan participants, because it is not limited to plan participants.