Jump to content

Top-heavy contribution requirement in new 401(k) plan in year when top


Recommended Posts

Posted

A top-heavy defined benefit plan was terminated 6/30/00 and all assets paid out.

A new 401(k) plan was effective 1/1/00.

What is the top-heavy contribution requirement in the 401(k) plan (3% of full-year compensation, 3% of compensation for 7/1/00-12/31/00, required for all participants, required only for participant that did not benefit in the DB plan, other)?

Is the top-heavy contribution requirement in the 401(k) plan affected by any top-heavy accrual in the DB plan? For example, if a participant had 1,000 hours of service in 2000 and received a year of top-heavy service in their accrued benefit determination, does that person have to also receive a top-heavy 401(k) plan contribution (since there was a short plan year ended 6/30/00, the participant did not get the benefit of using 2000 compensation in the top-heavy determination, but did get an additional year of top-heavy service)?

The safest and easiest course of action would seem to be to just give a 3% contribution to everyone in the 401(k) plan for 2000, but does anyone know it the plan sponsor could be okay not giving it to some participants (that had DB benefits), or giving less than 3% to participants who had DB accruals?

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

Terms of Use