Top Heavy Determination and Forfeiture Account

Are funds in the Plan's forfeiture account added into total plan assets when determining top heavy status?

For example, assume the Plan provides that forfeitures are used in the plan year following the plan year in which the funds were forfeited, and allows the Plan Administrator to use the funds for any permissible purpose (reduce fees, contributions, or reallocate).  A participant in 2018 terminates, takes a distribution and forfeits $1000 which is now in the forfeiture account as of 12/31/2018. 

Do we include that $1000 in the total plan assets when determining the top heavy ratio?

Thanks.

I think the TH rules refer to participant account balances, with certain add-backs, and a suspense account is not a participant account balance, so my interpretation is you ignore - not in numerator or denominator.

3 minutes ago, CuseFan said:

I think the TH rules refer to participant account balances, with certain add-backs, and a suspense account is not a participant account balance, so my interpretation is you ignore - not in numerator or denominator.

I agree.  TH rules are based on participant account balances, not plan assets.  One example is that "former key employees" are not in the TH test at all, even if they still have "plan assets".

Got it.  So while in the forfeiture account, not included.  When reallocated to participant accounts, back in the determination, if the participant's account is included in the determination (ie, not a former Key, for example).