Elective deferral limit conditioned on top heavy status

When a plan is top heavy, it is sometimes useful to amend the plan to set a $0 limit on elective deferrals for Key employees. This allows the Key employees to make contributions which will be automatically reclassified as catch-up contributions (provided they are eligible to make catch-up contributions) because they exceeded the plan-imposed limit of $0. Since catch-up contributions are disregarded for application of 416, this is a way to allow the Keys to contribute without triggering the top heavy minimum.

I am wondering if there is a way to specify that the $0 limit automatically applies in years when the plan is top heavy, and only when the plan is top heavy. In our adoption agreement (FT William) there is a checkbox in the "Minimum and Maximum Deferral Amounts" section for "Other limitations on Elective Deferrals (specify): ________". I am thinking of putting in that blank something along the lines of, "If the Plan is Top Heavy for the Plan Year, the maximum Elective Deferral contribution for Key Employees shall be $0 for the Plan Year." Possibly also adding "The application of this limit shall not restrict the Key Employee's right to make Catch-up Contributions, if they would otherwise be eligible to make Catch-up Contributions" just to be clear.

Any thoughts or opinions on this approach? Are there any issues with determining the plan limit based on the top heavy status? In theory, the plan administrator could know by the first day of the plan year whether or not the plan is top heavy for the current year, and so can adjust the keys' limits if needed.

Would this kind of language jeopardize the plan's preapproved status?

You should be fine since the amendment is basically limiting benefits that is not discriminatory, and you are not allowing for improper administrative discretion (this limit would automatically apply given the Top Heavy Status).  Also, you are not modifying the language of the document by changing the stated language of the options themselves.  You are customizing in a manner that is permissible in form.  Unfortunately, I suspect that without an individual letter of determination on the document, 100% certainty can't be assumed.  With that in mind, IMHO you will be fine.

Thanks, I appreciate the input.