top heavy safe harbor

[pmacduff]

ok - please help me out with a brain freeze...safe harbor nonelective 3% plan with only 401(k) deferrals and safe habor NE. Plan gets the top heavy "pass" because it consists "soley of employee deferral contributions and safe harbor contributions". Top heavy is determined at the end of the year for the next year; would have been TH in 2011 but for the free pass.

The owners retired and the son has taken over. The plan year is calendar but the Company fiscal is off calendar. The son has decided he may want to utilize the discretionary profit share option in the Plan. I know that if he does that will eliminate the top heavy free ride. We already know that 2012 is safe harbor but if he decides to put a PS contribution in for 2012, the plan will be considered top heavy because the top heavy calc at the end of 2011 for 2012 was 62.98% ...agreed?

[K2retire]

Yes, and the 3% SH contribution will cover most of the TH contribution.