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Top-heavy testing for short year plan


Jean

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Posted

Is there any guidance within top-heavy regulation regarding the correct way to test plan year the amends from fiscal to calendar, thus creating a short plan year?

Plan Year #1: 07/01/98 - 6/30/99

Plan Year #2: 07/01/99 - 12/31/99

Plean Year #3: 01/01/00 - 12/31/00

What is the correct determination dates to test this plan for year 2 & 3?

Posted

Top Heavy always refers to the valuation date withing the immediately preceding plan year. If EOY valuation, some DBs and usually all DCs, then 6/30/99 is one date and 12/31/99 is the other date, short years are effectively irrelvannt.

If BOY valuations, then 7/1/98 and 7/1/99 are the testing dates.

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