Top Heavy percentage

[Dazednconfused]

Plan is TH For 2009 (TH in 2008), question regarding the allocation for TH. Lets say the key makes a deferral contribution (and no other er contributions are made) of 5% of comp, my understanding is that then all P's eligible for a TH will receive 3% TH contribution (based on full yr comp). However, if the key defers only 2%, then all eligible P's will receive a 2% TH allocation since this is the highest percentage for the key, is this correct?

[Guest Sieve]

Yes. Unless it's a SH plan with only SH contributions, in which case TH does not apply.

[Tom Poje]

you did not indicate if the top heavy went to non-key employees. if the top heavy goes to all employees, then the key receieves but that kicks him up to a higher percentage which kicks everyone else eventuyally to 3%, or at least as I understand it.

[Dazednconfused]

Goes to non keys, thanks!