JUNE 97 EXAM, Q62

[Jean]

Can someone please explain the answer?

Based on the following information, what is the participant's annual top-heavy minimum accrued

benefit as of June 30, 1997?

The participant works over 1000 hours per year and only participates in this plan.

The plan has always been super top-heavy.

The top-heavy min benefit is based upon years of service.

The plan year is July 1 to June 30.

DOH = 7/1/90

Plan Effective = 7/1/86

Annual comp:

6/30/91 = $20K

6/30/92 = 25K

6/30/93 = 25K

6/30/94 = 15K

6/30/95 = 22K

6/30/96 = 23K

6/30/97 = 10K

ANSWER = $3080???

[david rigby]

Looks to me like the question is testing your knowledge of IRC 416©(1)(D).

High 5 year average comp is 22,000 (92 thru 96). Seven years of top heavy service.

22000 x .02 x 7 = 3080.