Top Heavy Minimum

Suppose you have a company that sponsors a traditional DB plan and 401(k) plan with a December year end.

1. The DB terminated April 30, 2017 so no participant accrued a benefit for 2017.

2. The DB and 401(k) plans are top heavy as of 12/31/2016.

3. The plan documents indicate that a 5% top heavy minimum will be funded in the 401(k) plan instead of the 2% top heavy minimum in the DB plan.

Question: Since the DB plan terminated in 2017 without any participants receiving a benefit, can just a 3% top heavy minimum be funded in the 401(k) plan for 2017 or must the 5% be funded?

Thanks.

I think in this case your document calls for a 5% TH minimum which must be provided for 2017. But someone else may have past experience with this that would allow the lower 3%. However I think because they were participants in both for the plan year you will have to provided the higher benefit for 2017.