TOP HEAVY REQUIREMENTS Clause Samples
The Top Heavy Requirements clause sets out rules to ensure that retirement plans do not disproportionately benefit key employees, such as company owners or executives, over other employees. In practice, this clause requires that if a retirement plan becomes "top heavy"—meaning a significant portion of its assets are allocated to key employees—then minimum benefits or contributions must be provided to non-key employees to maintain fairness. The core function of this clause is to promote equitable treatment among all plan participants and to comply with regulatory standards, thereby preventing retirement plans from being used primarily as a benefit for a select group of individuals.
TOP HEAVY REQUIREMENTS. Neither Elective Deferrals nor Matching Contributions (if used to satisfy the ACP test) may be taken into account for the purpose of satisfying the minimum top-heavy contribution requirement.
TOP HEAVY REQUIREMENTS. F1 TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee is a Participant in this Plan and a Defined Benefit Plan maintained by the Employer, indicate which method shall be utilized to avoid duplication of top heavy minimum benefits.
TOP HEAVY REQUIREMENTS. If the Plan becomes a Top Heavy Plan during any Plan Year, the following provisions shall supersede any conflicting provisions in the Plan or Adoption Agreement and apply for such Plan Year:
(a) Except as otherwise provided below, the Employer contributions and Forfeitures allocated on behalf of any Participant who is not a Key Employee shall not be less than the lesser of three percent of such Participant's Compensation as defined in Part II.C. of the Adoption Agreement or in the case where the Employer has no defined benefit plan which designates this Plan to satisfy section 401 of the Code, the largest percentage of Employer contributions and Forfeitures, as a percentage of the Key Employee's Compensation as defined in Part II.C. of the Adoption Agreement and limited by section 401(a)(17) of the Code, allocated on behalf of any Key Employee for that year. The Minimum Top-Heavy Allocation is determined without regard to any Social Security contribution. This Minimum Top-Heavy Allocation shall be made even though, under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the Participant's failure to complete 1,000 Hours of Service (or any equivalent provided in the Plan), or (ii) the Participant's failure to make mandatory Employee contributions to the Plan, or (iii) compensation less than a stated amount. The Employer may elect in the Adoption Agreement to have this provision provide Key Employees with the Top-Heavy minimum benefit. Neither Elective Deferrals nor Matching Contributions may be taken into account for the purpose of satisfying the Minimum Top-Heavy Allocation.
TOP HEAVY REQUIREMENTS. If the Plan becomes a Top Heavy Plan during any Plan Year beginning after December 31, 1983, the following provisions shall supersede any conflicting provisions in the Plan and apply for such Plan Year:
TOP HEAVY REQUIREMENTS. If the Plan becomes a Top Heavy Plan during any Plan Year, the following provisions shall supersede any conflicting provisions in the Plan or Adoption Agreement and apply for such Plan Year:
(a) Except as otherwise provided below, the Employer contributions and forfeitures allocated on behalf of any Participant who is not a Key Employee shall not be less than the lesser of three percent of such Participant's Compensation or in the case where the Employer has no defined benefit plan which designates this plan to satisfy Section 401 of the Code, the largest percentage of Employer contributions and forfeitures, as a percentage of the first $200,000 of the Key Employee's compensation, allocated on behalf of any Key Employee for that year. The minimum allocation is determined without regard to any Social Security contribution. This minimum allocation shall be made even though, under other plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of (i) the Participant's failure to complete 1,000 Hours of Service (or any equivalent provided in the plan), or (ii) the Participant's failure to make mandatory employee contributions to the plan, or (iii) compensation less than a stated amount. Neither Elective Deferrals nor Matching Contributions may be taken into account for the purpose of satisfying the minimum allocation.
TOP HEAVY REQUIREMENTS. If the Plan becomes a Top Heavy Plan during any Plan Year, the following provisions shall supersede any conflicting provisions in the Plan or Adoption Agreement and apply for such Plan Year:
TOP HEAVY REQUIREMENTS. Notwithstanding any provision of this Plan to the contrary, if the Plan is or becomes Top Heavy in any Plan Year beginning after December 31, 1983, then the provisions of this Article shall become applicable and supersede any conflicting provisions of this Plan.
TOP HEAVY REQUIREMENTS. A. For purposes of determining whether a plan is top-heavy under section 416, elective deferrals are considered employer contributions. Elective deferrals may not be used, however, to satisfy the minimum contribution requirement under section 416. Thus, in any year in which a key employee makes an elective deferral, this Model SEP is deemed top-heavy for purposes of section 416 and the employer is required to make the minimum contribution to the SEP-IRA of each non-key employee eligible to participate in the SEP.
1. an officer of the employer (if the employee’s compensation exceeds 50% of the limit under section 415(c)(1)(A));
2. an owner of one of the ten largest interests in the employer (if the employee’s compensation exceeds 100% of the limit under section 415(c)(1)(A));
TOP HEAVY REQUIREMENTS. A. TOP HEAVY VESTING If this Plan becomes a Top Heavy Plan, the following vesting schedule, based on number of Years of Service, for such Plan Year and each succeeding Plan Year, whether or not the Plan is a Top Heavy Plan, shall apply and shall be treated as a Plan amendment pursuant to this Plan. Once effective, this schedule shall also apply to any contributions made prior to the effective date of Code section 416 and/or before the Plan became a Top Heavy Plan.
TOP HEAVY REQUIREMENTS. The top-heavy requirements of Code section 416 and Article XIII of the Plan shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code section 401 (k)( 12) and matching contributions with respect to which the requirements of Code section 401(m)(1l) are met.