Key Employee

[Guest elang]

A law firm is considering making 2 associates Non-Equity Partners on 7/1/14. The current group of partners (5) do not make any deferrals during a given year until late in the year when they determine whether or not they are going to make a profit sharing contribution. If so, then they make elective deferrals and subsequently make a profit sharing contribution to all staff, which covers the TH contribution that they need to make.

Based on the above, they have 2 questions:

1) Is a "Non-Equity" partner considered to be a Key Employee?

2) If yes, then does an elective deferral that employee made as an associate during the first half of the year trigger a required TH contribution for 2014?

Thanks in advance for your help!

[masteff]

Refer to Reg 1.416-1 See Q&A T-12 ("at anytime during the plan year") and T-16 & T-17 ("not a corporation ... capital or profits interest").