Who is key officer in fiscal year 401k plan

[jkharvey]

Last week I searched the forums and found an answer to this question, but now I can't find that thread again. Here are the facts. I have a 401k plan with a PYE of 9/30. I am trying to determine if the plan is Top Heavy for 9/30/2010. I have one person who is an officer and during the PYE 9/30/2009 she earned 151,000. During PYE 9/30/2008 she earned well below any limit at 85,000.

When I generate a TH report at 9/30/2009 out of Relius Administration, the system identifies this officer as a Key EE because her compensation is in excess of the calendar year 2008 limit of 150,000. My research seems to indicate that the compensation for determination of TH status for the officer is for the "calendar year in which the plan year ends". This comes from Treasury Regulation 1.416-1 T-14Q. Relius, however, is using "logic" in their system that uses the limit in effect at the beginning of the plan year and they are extremely insistent that this is correct.

My bottom line question is this. To determine TH status for 9/30/2010, do I look at the officer's compensation in 9/30/2009? If so, what limit is used?

Thank you

[GMK]

All I found in a quick search is the last line in this link:

http://www.tsc401k.com/employee.htm

which reads, "For non-calendar year plans, the compensation thresholds are those in effect at the beginning of the Plan Year."

Edit to add this link (see third bullet on page 2):

http://www.lindquist.com/files/Publication...imits_Chart.pdf

No cites given in either link.