Top Heavy Definitions Clause Samples
The "Top Heavy Definitions" clause establishes the criteria and specific terms used to determine when a retirement plan is considered "top heavy"—meaning a significant portion of the plan's benefits are allocated to key employees, such as owners or officers. This clause typically outlines the percentage thresholds and the types of contributions or account balances that are included in the calculation, ensuring that all parties understand how top heavy status is assessed. Its core practical function is to provide clarity and consistency in applying regulatory requirements, which helps ensure compliance with IRS rules and protects the interests of non-key employees by triggering certain minimum benefit requirements if the plan is found to be top heavy.
Top Heavy Definitions. When capitalized, the following words and phrases have the following meanings when used in this Section:
Top Heavy Definitions. The following terms, as used in this Plan, shall have the following meaning:
Top Heavy Definitions. For purposes of this Article XIII and any amendments to it, the terms listed in this Section 13.1 have the meanings ascribed to them below.
Top Heavy Definitions a. Key Employee shall mean any Employee or former Employee (and the beneficiaries of such Employee) who at any time during the Determination period was:
i. an officer of the Employer or any Affiliated Employer if such individual's annual Compensation exceeds 50 percent of the dollar limitation under Section 415(b)(1)(A) of the Code,
ii. an owner (or considered an owner under Section 318 of the Code) of one of the ten largest interests in the Employer or Affiliated Employer if such individual's Compensation exceeds 100 percent of dollar limitation, under Section 415(c)(1)(A) of the Code, or
iii. a five (5) percent owner of the Employer or Affiliated Employer, or
iv. a one (1) percent owner of the Employer or Affiliated Employer who has an annual compensation of more than $150,000.
Top Heavy Definitions. (A) KEY EMPLOYEE: Any Employee or former Employee (and the Beneficiaries of such Employee) who at any time during the determination period was an officer of the Employer if such individual's annual Compensation exceeds 50% of the dollar limitation under Section 415(b)(1)(A) of the Code, an owner (or considered an owner under Section 318 of the Code) of one of the ten largest interests in the Employer if such individual's Compensation exceeds 100% of the dollar limitation under Section 415(c)(1)(A) of the Code, a 5 per cent owner of the Employer, or a 1 per cent owner of the Employer who has an annual Compensation of more than $150,000. Annual compensation means compensation as defined in Item B(4)(a) of the Adoption Agreement, but including amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the Employee's gross income under Section 125, Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code. The determination period is the Plan Year containing the Determination Date and the 4 preceding Plan Years. The determination of who is Key Employee will made by the Committee in accordance with Section 416(i)(1) of the Code and the regulations thereunder.
(B) TOP-HEAVY PLAN: This Plan, for any Plan Year beginning after December 31, 1983, if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent.
(C) TOP-HEAVY RATIO: For purposes of determining if the Plan is a Top-Heavy Plan:
(1) If the Employer maintains one or more defined contribution plans (including any Simplified employee pension Plan) and the Employer has not maintained any defined benefit Plan which during the 5-year period ending on the Determination Date(s) has or has had accrued benefits, the Top-Heavy Ratio for this Plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) (including any...
Top Heavy Definitions. The following terms, as used in this Article 6, shall have the following meaning:
Top Heavy Definitions. For purposes of this Article 17, the following definitions shall apply: 96 - 91 -
(a) The term "determination date" with respect to any Plan Year shall mean the last day of the preceding Plan Year (or, in the case of the first Plan Year of the Plan, the last day of the first Plan Year).
Top Heavy Definitions. For purposes of this Article XVI, the following definitions shall apply:
Top Heavy Definitions