A defined-contribution retirement plan in which the accounts of key employees make up more than 60% of the aggregate value of the plan. Key employees are partial owners of the company or officers of the company whose annual compensation is above a certain level. The IRS has established special rules governing top-heavy plans. If plan administrators do not comply with these rules, their plan may become disqualified.
Related information about top-heavy plan:
- Internal Revenue Manual - 4.72.5 Top-Heavy Plans
A top-heavy plan must provide non-key employees with a minimum benefit if it is a defined benefit plan, or a minimum contribution if it is a defined contribution ...
- Top-Heavy Plan: Definition from Answers.com
Top-Heavy Plan Pension or other employee benefit plan that favors highly compensated employees or top executives or owners of a company.
- Is Your Employer Sponsored Retirement Plan "Top Heavy ...
Mar 22, 2010 ... A “Top Heavy” plan can lead to required plan modifications, the providing of additional benefits or contributions, and unnecessary litigation.
- Safe Harbor 401(k) Top-Heavy Plans - McKay Hochman Company ...
Feb 25, 2010 ... If a nonelective contribution of 3% or more is made to a top-heavy plan, that contribution will generally satisfy the top-heavy contribution ...
- Top Heavy Plans - Noble-Davis Consulting, Inc.
Another solution to a top-heavy plan might be to adopt 401(k) safe harbor provisions. Adding. 401(k) safe harbor provisions allows you to bypass the top heavy ...
- Top-Heavy Plan - The Free Dictionary
adj. top-heav·i·er, top-heav·i·est. 1. Likely to topple because of an uneven distribution of weight, with the majority being at the top. 2. Accounting Overcapitalized.
- TOP HEAVY RULES FOR DEFINED CONTRIBUTION PLANS What ...
minimum contribution requirements for the employer. For example, if an employer does not make any employer contributions to a top heavy plan for a given plan ...
- Using the Safe Harbor 401(k) Plan Top-Heavy ... - SunGard Relius
Jul 16, 2010 ... While a top-heavy plan historically also had to apply a top-heavy vesting schedule (either 3-year cliff, 6-year graded, or a more favorable ...