What top-heavy benefit does HCE get in a combo plan?

Hi

Having a bit of brain freeze.

DB/DC combo, both plan t/h. DB does not provide t/h and also no t/h for key under DC. Plans tested together

I have owner, a non-owner HCE and NHCE, total 3 participants.

Non-owner HCE gets 0.05% in DB for 401(a)(26). NHCE is only covered under DC.

For 2020, gateway requirement is 5%. The owner does not want any PS allocation and will only get 3.5% of compensation as AB in the DB plan.

Under gateway, NHCE gets 5% in DC.

What is the minimum t/h I have to provide to the non-owner HCE under the PS plan?

3% or 3.5% or 5%

Thank you

Non-key HCE is benefiting in both DB and DC, correct? So 5% DC for TH.

There are a number of ways you can do it but it needs to be spelled out in the plan documents and coordinated with both documents as to where and how the T-H minimum is satisfied. That said I think CuseFan's answer of 5% in the DC plan is probably the most common in small combo plans. At least that's probably how we would set up the plan if we were doing it, unless there was some obvious reason to do it differently.

Cusefan, correct however, even if the key is not getting any PS allocation? There is only PS provision, nothing else in the DC plan.

Lou S. t/h is provided by DC plan only and key employees are excluded. In my case not getting any PS allocation.

The reason I am asking is that, is 5% required for the non-HCE because the key is getting over 3% of accrued benefit under the DB plan which is equivalent of 5% in a DC plan?

Bonus question, what if the key was getting only 2% under the DB plan?

Thank you both for your input.

The owner is a participant in the DC plan just not getting an allocation this year correct and is also a participant in the DB plan, correct?

The non-Key HCE is a participant in both the DC and DB plan, correct?

Your document(s) says the T-H minimum is stasfied in the DC plan for participants in both DB and DC, correct?

The Plans are being tested together to pass 401(a)(4) correct?

Sounds like the non-Key HCEs needs a 5% T-H minimum in the DC plan if my assumptions above are true.

You are correct on all accounts. Thank you