Top Heavy DC Minimum For Partial Year Participation

[Guest pjharvey]

In a top heavy DC plan with multiple entry dates, can the TH minimum allocation be based on 415 (or W-2) compensation as a participant, rather than a full year comp.?

The ability to do this is not in the 416 regs. Is there a specific cite for allowing this?

[pmacduff]

In Sal Tripodi's ERISA Outline Book, I found the following on page 3.113 of Volume I: "1.a.2) If a non-key employee becomes a participant during the Plan Year, the 3% minimum allocation must be based on his compensation for the entire plan year, even though allocations in excess of the minimum might be based only on compensation from the plan entry date to the end of the plan year. Treas.1.416-1,M-7" So - in answer to your question, top heavy requires that you use total plan year comp, not just comp as a participant