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Is IRS Website Wrong in Explanation of Top Heavy Minimum Contribution Requirement?
BenefitsLink Message Boards 
Nov. 17, 2021 "Or, at least I think the site is wrong in this case. On the page 'Is my 401(k) Plan Top-Heavy?' (https://www.irs.gov/retirement-plans/is-my-401k-top-heavy), under the section titled 'Making Minimum Contributions...' it says: 'If the average contribution for all key employees is less than 3%, non-key employees also receive that lower percentage instead of 3%.' I don't believe it's the average contribution for all key employees -- instead, it's the the highest Key Employee's contribution that counts. If I have one Key Employee with a contribution of 2.5% and another with 1.5%, the TH minimum would be 2.5%, not 2%. Agree? So who do I contact at the IRS to ask about it? (Or am I really wrong? I consulted Treas. Reg. sec. 1.414-1, M-7, and the ERISA Outline Book, Chapter 3B, Sec. IV, Part A.2. Both of those seem to agree with my position." |
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