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Top Heavy
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Updated: 6/Dec/06 14:33:08
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Top-Heavy

A plan is considered Top-Heavy if 60% of the total present value of accrued benefits in the plan belongs to Key Employees.

If a plan is Top-Heavy, a special accelerated vesting schedule may apply, and the Non-Key Employees must receive a certain minimum level of benefits in the plan. The minimum benefits may or may not be granted to Key Employees, depending on the provisions of the plan document.

See article on Top-Heavy Plans for additional discussion.


IRC 416
Key Employee
Non-Key Employee
Glossary

Top-Heavy

A plan is considered Top-Heavy if 60% of the total present value of accrued benefits in the plan belongs to Key Employees.

If a plan is Top-Heavy, a special accelerated vesting schedule may apply, and the Non-Key Employees must receive a certain minimum level of benefits in the plan. The minimum benefits may or may not be granted to Key Employees, depending on the provisions of the plan document.


Key Employee
Non-Key Employee
Glossary