Top-Heavy Clarification

[Guest andmik]

Hello:

I have two plans that are aggregated for coverage and ADP/ACP testing.

The question I cannot seem to answer is whether the Top Heavy test can/must be done in the aggregate, or must it be done for each plan separately?

Thanks in advance for any feedback that might clarify the top-heavy application whne plans are aggregated.

Andmik

[Guest Sieve]

Aggregate of plans is sometimes required in order to determine top heavy status. However, if plans are aggregated in order to pass IRC Section 410(b) (coverage), then they must be aggregated for top heavy purposes. (IRC Section 416(g)(2)(A)(i)(II) and Treas. Reg. Section 1.416-1, Q&A T-6, & Ex. 1.)

As a follow-up, if there are 2 or more plans that are top heavy (whether or not aggregated), only 1 minimum contribution must be made to any individual (even if that individual participates in both plans), although the minimum may be higher if there's a TH DC and DB plan. (IRC Section 416(f) and Treas. Reg. Section 1.416-1, Q&A M-8 & M-12.)