top heavy exemption or not

[Gary]

a 401k plan with only deferrals and a safe harbor match as I understand is exempt from the top heavy allocation requirement.

The company then adds a separate and new profit sharing plan and a new defined benefit plan.

All three plans are part of required aggregation group.

the group is tested to be top heavy.

for employees only in the 401k match plan: do they need to receive a top heavy allocation OR is that 401k plan still exempt from top heavy?

rev rul 2004-13 seems to make clear that if within same 401k plan there are profit sharing allocations, the exemption does not apply.

However, I am not sure w/r/t situation above.

thanks

[ETA Consulting LLC]

for employees only in the 401k match plan: do they need to receive a top heavy allocation OR is that 401k plan still exempt from top heavy?

I would say yes, since the plan actually covers "Key" employees that are part of the required aggregation group (who actually benefited from the other plans in addition to the Safe Harbor 401(k) plan).

Good Luck!

[chc93]

for employees only in the 401k match plan: do they need to receive a top heavy allocation OR is that 401k plan still exempt from top heavy?

I would say yes, since the plan actually covers "Key" employees that are part of the required aggregation group (who actually benefited from the other plans in addition to the Safe Harbor 401(k) plan).

Good Luck!

But, doesn't the key employee have to actually "benefit" for the plan year in the 401k "non-top-heavy" plan to trigger a top-heavy minimum. For example, an associates 401k plan, where an associate becomes a key employee and stops benefiting in the associates plan but now benefits in the "main" 401k PS plan... this doesn't trigger a top-heavy minimum in the associates plan just because he has an account balance.