Top-Heavy Plan Clause Samples
A Top-Heavy Plan clause defines the rules and requirements that apply when a retirement plan, such as a 401(k), is considered 'top-heavy'—meaning a significant portion of its assets are held by key employees. When a plan is top-heavy, the clause typically mandates minimum contributions or benefits for non-key employees to ensure fairness and compliance with IRS regulations. This may involve the employer making additional contributions to the accounts of lower-paid employees. The core function of this clause is to prevent retirement plans from disproportionately favoring owners or highly compensated employees, thereby maintaining equitable treatment for all participants.
Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group;
(2) the Plan is a part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Required Aggregation Group exceeds 60 percent; or
(3) the Plan is a part of a Required Aggregation Group and a Permissive Aggregation Group and the Top-Heavy Ratio for both Groups exceeds 60 percent.
Top-Heavy Plan. For any Plan Year, the Employer's Plan is Top-Heavy if any of the following conditions exist:
Top-Heavy Plan. Top Heavy Plan" means, for Plan years commencing after December 31, 1983, that, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of the Company's aggregation group, exceeds sixty percent (60%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of the Company's aggregation group.
Top-Heavy Plan. This Plan is a Top-Heavy Plan for any Plan Year if it is determined to be such pursuant to Section 10.08.
Top-Heavy Plan. For any Plan Year beginning after December 31, 1983, this Plan is Top-Heavy if any of the following conditions exists:
(a) 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.
(b) 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.
(c) 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 group of plans and the Top-Heavy Ratio for the permissive aggregation group exceeds 60 percent.
Top-Heavy Plan. Top heavy plan means a qualified plan under which (as of the determination date):
(i) if the plan is a defined benefit plan, the present value of the cumulative accrued benefits for key employees exceeds sixty percent (60%) of the present value of the cumulative accrued benefits for all employees, and
(ii) if the plan is a defined contribution plan, the aggregate of the accounts of key employees exceeds sixty percent (60%) of the aggregate of all of the accounts of all employees. In applying the foregoing, the following rules shall be observed:
(a) Each plan of an Employer required to be included in an aggregation group shall be a top heavy plan if such aggregation group is a top heavy aggregation group.
(b) For the purpose of determining the present value of the cumulative accrued benefit for any employee under a defined benefit plan, or the amount of the account of any employee under a defined contribution plan, such present value or amount shall be increased by the aggregate distributions made with respect to such employee under the plan during the five (5) year period ending on the determination date.
(c) Any rollover contribution (or similar transfer) initiated by the employee, made from a plan maintained by one employer to a plan maintained by another employer and made after December 31, 1983, to a plan shall not be taken into account with respect to the transferee plan for the purpose of determining whether such transferee plan is a top heavy plan (or whether any aggregation group which includes such plan is a top heavy aggregation group). Any rollover contribution (or similar transfer) not described in the preceding sentence shall be taken into account with respect to the transferee plan for the purpose of determining whether such transferee plan is a top heavy plan (or whether any aggregation group which includes such plan is a top heavy aggregation group).
(d) If any individual is not a key employee with respect to a plan for any Plan Year, but such individual was a key employee with respect to the plan for any prior Plan Year, the cumulative accrued benefit of such employee and the account of such employee shall not be taken into account.
(e) The determination of whether a plan is a top heavy plan shall be made once for each Plan Year of the plan as of the determination date for that Plan Year.
(f) In determining the present value of the cumulative accrued benefits of employees under a defined benefit plan, the determination shall be made as of ...
Top-Heavy Plan. For any Plan Year beginning after 1983, the Employer's Plan is top-heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and this Plan is not part of any required Aggregation Group or Permissive Aggregation Group of Plans.
(b) If the Employer's 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%.
(c) If the Employer's 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%.
Top-Heavy Plan. For any Plan Year, this Plan is a Top-Heavy Plan if any of the following conditions exist:
(1) The Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans, and the Top-Heavy Ratio for the Plan exceeds 60 percent.
(2) The Plan is part of a Required Aggregation Group of plans, but not part of a Permissive Aggregation Group, and the Top-Heavy Ratio for the Required Aggregation Group of plans exceeds 60 percent.
(3) The Plan is 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.
Top-Heavy Plan. The Plan shall constitute a "Top-Heavy Plan" for any Plan Year if, as of the applicable Determination Date, the sum of (A) the accounts of Key Employees under any Aggregated Plan that is of a defined contribution type and (B) the present value of the cumulative accrued benefits of Key Employees under any Aggregated Plan that is of a defined benefit type exceed sixty percent (60%) of the sum of (X) the accounts of all Employees under any Aggregated Plan that is of a defined contribution type and (Y) the present value of the cumulative accrued benefits of all Employees under any Aggregated Plan that is of a defined benefit type. The above determinations shall be made in accordance with Section 416(g) of the Code.
Top-Heavy Plan. Prior to the Adjustment Date, the Company -------------- will pay and discharge all liabilities with respect to underfunding of the ▇▇▇▇▇ ▇▇▇▇▇▇ Associates Inc. Savings Plan and the ▇▇▇▇▇ ▇▇▇▇▇▇ Consulting Group Savings Plan (the "Designated Plans"), and at or prior to the Closing, the Company will provide evidence reasonably satisfactory to WORK that all such liabilities have been paid and discharged.