Top Heavy & Safe Harbor

[Dazednconfused]

Hi,

Plan is top heavy for 2013, safe harbor 3% and employee deferrals are the only contributions for the year. Compensation is considered from date of entry (7/1 in this case), a participant enters on 7/1/13 and is employed on last day. Would the new participant's 3% safe harbor contribution be based on compensation from his entry date of 7/1 or their full plan year compensation?

I believe that since only safe harbor contributions & deferrals are funded for the year they are considered not to be top heavy and can use the compensation from 7/1 on for the 3% allocation, am I off the mark? I know any PS allocation would be full year compensation just fuzzy at the moment on the safe harbor..

Thanks.

[Lou S.]

If SH is comp from date of entry and it is only allocation, your plan is deemed to not be TH. Or a roundabout way of say you are right comp from 7/1 is OK.