Top Heavy

[Jay3]

This is a top heavy plan. The key employee deferred 4%. The plan doc reads that all get the top heavy (non-key and key). All non-key will get 3%. Do I still need to give an additional 3% to the key or does his deferral off set this?

[MSN]

The reg below would seem to imply that you can treat the key employee's elective contributions as top heavy contributions for purposes of satisfying minimum contribution requirements.

§1.416-1. Questions and answers on top-heavy plans

M-20 Q. May elective contributions be treated as employer contributions

for purposes of satisfying the minimum contribution or benefit

requirement of section 416©(2)?

A. Elective contributions on behalf of key employees are taken into

account in determining the minimum required contribution under section

416©(2). However, elective contributions on behalf of employees other

than key employees may not be treated as employer contributions for

purposes of the minimum contribution or benefit requirement of section

416. See section 401(k)(4)© and the regulations thereunder. This

Question and Answer is effective for plan years beginning after December

31, 1988. [Reg. §1.416-1.]