Top heavy minimum contribution

[eilano]

401(k) and match portion's eligibility requirements are immediate entry, enter on the first day of the quarter following his or her date of employment. Profit sharing portion requires one year of service and age 21, enter on the first day of the quarter following completion of the requirements. Suppose for the 2000 plan year that an employee was hired on 9/15/2000, he enters the 401(k) and match portion of the plan on 10/1/2000 but he will not enter the profit sharing portion until 10/1/2001. The plan is top heavy for the 2000 plan year. It is my understanding that this employee would be eligible to receive the top heavy minimum contribution for the 2000 plan year, correct? Suppose that the 401(k) and profit sharing plans are actually two separate plans, would this employee also be eligible to receive the top heavy minimum? Also, suppose the employer had a previous plan that terminated and was top heavy. New profit sharing plan was established the following year. Wouldn't the new plan be top heavy?

[Guest]

yes, doesn't make a difference whether individual is eligible for profit sharing or not. top heavy goes to any participant.

yes, even if you have two plans. it can get ugly if top heavy is given in the ps and not in the 401(k).

if you had previous plan, you have to track balances the balances for 5 years, assuming that all aounts were distributed.