TOP HEAVY STATUS Clause Samples
The Top Heavy Status clause defines whether a retirement plan is considered 'top heavy,' meaning that a significant portion of its benefits or account balances are allocated to key employees, such as owners or highly compensated individuals. In practice, this clause outlines the criteria for determining top heavy status, typically by comparing the total value of benefits for key employees to those for all other employees, and may require annual testing. Its core function is to ensure compliance with IRS regulations by mandating minimum benefits or contributions for non-key employees if the plan is found to be top heavy, thereby promoting fairness and preventing disproportionate benefit allocations.
TOP HEAVY STATUS. (a) The Plan shall be subject to the Top-Heavy Plan requirements of Article 15(check one):
(1) o for each Plan Year, whether or not the Plan is a "top-heavy plan" as defined in Subsection IS.OI(g) of the Basic Plan Document
(2) þ for each Plan Year, if any, for which the Plan is a "top-heavy plan" as defined in Subsection IS.Ol(g) of the Basic Plan Document.
(3) o Not applicable. (Choose only if (A) Plan covers only employees subject to a collective bargaining agreement, or (B) Option 1. 11(a)(3), 401(k) Safe Harbor Matching Employer Contributions, or Option 1.12(0)(3), 401(k) Safe Harbor Formula, is selected, and the Plan does not provide for Employee Contributions or any other type of Employer ontributions.)
(b) If the Plan is or is treated as a "top-heavy plan" for a Plan Year, each non-key Employee shall receive an Employer Contribution of at least 3.0 (3 or 5)% of Compensation for the Plan Year in accordance with Section 15.03 of the Basic Plan Document The minimum Employer Contribution provided in this Subsection 1.22(b) shall be made under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer, unless the Employer elects otherwise below:
(1) o The minimum Employer Contribution shall be paid under this Plan in any event.
(2) o Another method of satisfying the requirements of Code Section 416. Please complete the 416 Contributions Addendum to the Adoption Agreement describing the way in which the minimum contribution requirements will be satisfied in the event the Plan is or is treated as a "top-heavy plan".
(3) o Not applicable. (Choose only if (A) Plan covers only employees subject to a collective bargaining agreement, or (B) Option 1. 11(a)(3), 401(k) Safe Harbor Matching Employer Contributions, or Option 1.12(a)(3), 401(k) Safe Harbor Formula, is selected and the Plan does not provide for Employee Contributions or any other type of Employer Contributions.)
TOP HEAVY STATUS. The provisions of Article XIII of the Plan shall always apply.
TOP HEAVY STATUS. (a) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE 9 (check one):
(1) [ ] for each Plan Year.
(2) [ ] for each Plan Year, if any, for which the Plan is Top- Heavy as defined in Section 9.02.
(3) [ ] Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.)
(b) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) [ ] Not Applicable.
(c) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR, EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST (3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE WITH SECTION 9.03 (check one):
(1) [ ] under this Plan in any event.
(2) [ ] under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer.
(3) [ ] Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.
TOP HEAVY STATUS. (a) The Plan shall be deemed to be top-heavy for a Plan Year if, as of the Determination Date for such Plan Year, (1) the sum of Account Balances of Members who are Key Employees exceeds 60% of the sum of Account Balances of all Members unless an Aggregation Group including the Plan is not top-heavy or (2) an Aggregation Group including the Plan is top-heavy. An Aggregation Group shall be deemed to be top-heavy as of a Determination Date if the sum (computed in accordance with section 416(g)(2)(B) of the Code and the Treasury regulations promulgated thereunder) of (1) the Account Balances of Key Employees under all defined contribution plans included in the Aggregation Group and (2)
TOP HEAVY STATUS. (a) The Plan shall be subject to the Top-Heavy Plan requirements of Article 9 (check one):
(1) |_| for each Plan Year.
(2) |X| for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02.
(3) |_| Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.)
(b) In determining Top-Heavy status, if necessary, for an employer with at least one defined benefit plan, the following assumptions shall apply:
(1) Interest rate: ________% per annum
(2) Mortality table: _______________
(3) |X| Not Applicable.
(c) In the event that the Plan is treated as Top-Heavy for a Plan Year, each non-key Employee shall receive an Employer Contribution of at least 3 (3, 4, 5, or 7 1/2) % of Compensation for the Plan Year in accordance with Section 9.03 (check one):
(1) |X| under this Plan in any event.
(2) |_| under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer.
(3) |_| Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.
TOP HEAVY STATUS. The Plan shall be deemed to be top-heavy if, as of any Determination Date, (i) the sum (computed in accordance with Section 416(g) of the Code and the regulations promulgated thereunder) of the Account Balances of Key Employees under the Plan exceeds sixty percent (60%) of the sum of the Account Balances of all individuals (excluding Former Key Employees and individuals who have not performed any services for the Company or an Affiliated Company at any time during the five-year period ending on the Determination Date) under the Plan unless an Aggregation Group including the Plan is not top-heavy or (ii) an Aggregation Group including the Plan is top-heavy. An Aggregation Group shall be deemed to be top-heavy as of a Determination Date if the sum (computed in accordance with Section 416(g)(2)(B) of the Code and the regulations promulgated thereunder) of the Account Balances of the Key Employees under all defined contribution plans included in the Aggregation Group and the Accrued Benefit of all Key Employees under all defined benefit plans included in the Aggregation Group exceeds sixty percent (60%) of the sum of the Account Balances and the Accrued Benefit of all individuals (excluding the Account Balances and the Accrued Benefit of former Key Employees and individuals who have not performed any services for the Company or an Affiliated Company at any time during the five-year period ending on the Determination Date) under such plans. The foregoing determination shall be made by the Committee. The accrued benefits and accounts of any individual who has not performed services for the Company or an Affiliation during the one-year period ending on the Determination Date shall not be taken into account.
TOP HEAVY STATUS. (a) The Plan shall be subject to the Top-Heavy Plan requirements of Article 9 (check one):
(1) [ ] for each Plan Year
(2) [X] for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.2.
(3) [ ] Not, applicable. (This option is available for plans converting only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.5.)
(b) In determining Top-Heavy status, if necessary for an Employer with at least one defined benefit plan, the following assumptions shall apply:
(1) [ ] Interest rate: % per annum.
(2) [ ] Mortality table: . --------------
(3) [X] Not applicable.
(c) In the event that the Plan is treated as Top-Heavy for a Plan Year, each Non-Key Employee shall receive an Employer contribution of at least 3 (3, 4, 5, or 7 1/2) % of Compensation for the Plan Year in accordance with Section 9.3 (check one):
(1) [ ] under this Plan in any event.
(2) [X] under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer.
(3) [ ] Not applicable. (This option is available for plans covering only Employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.5.)
TOP HEAVY STATUS. (a) The Plan shall be subject to the Top-Heavy Plan requirements of Article 9 (check one): (1) for each Plan Year. (2) x for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02.
(3) Not applicable. (This option is available for plans covering only employees subject to a collective bargaining agreement and there are no Employer or Matching Contributions elected in Section 1.05.)
TOP HEAVY STATUS. (a) The Plan shall be subject to the Top-Heavy Plan requirements of Article 9 (check one):
(1) X/ for each Plan Year.
(2) for each Plan Year, if any, for which the Plan is Top-Heavy as defined in Section 9.02.
(b) In determining Top-Heavy status, if necessary, for an Employer with at least one defined benefit plan, the following assumptions shall apply:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) X/ Not Applicable
(c) In the event that the Plan is treated as Top-Heavy for a Plan Year, each non-key Employee shall receive an Employer Contribution of at least 3 (3, 4, 5, or 7 1/2)% of Compensation for the Plan Year in accordance with Section 9.03 (check one):
(1) X/ under this Plan in any event. (2) / / under this Plan only if the Participant is not entitled to such contribution under another qualified plan of the Employer.
TOP HEAVY STATUS. (a) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE 15 (check one):
(1) [ ] for each Plan Year, whether or not the Plan is a "top- heavy plan" as defined in Subsection 15.01(f).
(2) [X] for each Plan Year, if any, for which the Plan is a "top-heavy plan" as defined in Subsection 15.01(f).
(3) [ ] Not applicable. (CHOOSE ONLY IF PLAN COVERS ONLY EMPLOYEES SUBJECT TO A COLLECTIVE BARGAINING agreement.)
(b) IN DETERMINING WHETHER THE PLAN IS A "TOP-HEAVY PLAN "FOR AN EMPLOYER WITH AT LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY:
(1) [X] Interest rate: 8% per annum.
(2) [X] Mortality table: UP 1884 GAM
(3) [ ] Not applicable. (CHOOSE ONLY IF EITHER (a) PLAN COVERS ONLY EMPLOYEES SUBJECT TO A COLLECTIVE BARGAINING AGREEMENT OR (b) EMPLOYER DOES NOT MAINTAIN AND HAS NOT MAINTAINED ANY DEFINED BENEFIT PLAN DURING THE FIVE-YEAR PERIOD ENDING ON THE APPLICABLE "DETERMINATION DATE", AS DEFINED IN SUBSECTION 15.01(a).)
(c) IF THE PLAN IS OR IS TREATED AS A "TOP-HEAVY PLAN" FOR A PLAN YEAR, EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST 5 (3, 4, 5, OR 7 -1/2% OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE WITH SECTION 15.03. THE MINIMUM EMPLOYER CONTRIBUTION PROVIDED IN THIS SUBSECTION 1.21(c) SHALL BE MADE UNDER THIS PLAN ONLY IF THE PARTICIPANT IS NOT ENTITLED TO SUCH CONTRIBUTION UNDER ANOTHER QUALIFIED PLAN OF THE EMPLOYER, UNLESS THE EMPLOYER ELECTS OTHERWISE BELOW:
(1) [ ] The minimum Employer Contribution shall be paid under this Plan in any event.
(2) [ ] Another method of satisfying the requirements of Code Section 416. Please complete the 416 Contribution Addendum to the Adoption Agreement describing the way in which the minimum contribution requirements will be satisfied in the event the Plan is or is treated as a "top-heavy plan".
(3) [ ] Not applicable. (CHOOSE ONLY IF PLAN COVERS ONLY EMPLOYEES SUBJECT TO A COLLECTIVE BARGAINING AGREEMENT.)