Modification of Top Heavy Rules Clause Samples
The "Modification of Top-Heavy Rules" clause defines how a retirement or benefit plan will adjust its provisions if it becomes classified as top-heavy, meaning a significant portion of its benefits are allocated to key employees. In practice, this clause typically outlines the specific changes that will be made to contribution levels, vesting schedules, or minimum benefits to ensure compliance with legal requirements for top-heavy plans. Its core function is to ensure the plan remains in compliance with IRS regulations, thereby protecting the interests of non-key employees and preventing potential penalties for the employer.
Modification of Top Heavy Rules. The top-heavy requirements of Section 416 of the Code and the plan shall not apply in any year beginning after December 31, 2001, in which the plan consists solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met.
Modification of Top Heavy Rules. (a) For Plan years beginning after December 31, 2001, this paragraph shall apply for purposes of determining whether the Plan is top heavy under Code Section 416(g), and whether the Plan satisfies the minimum requirements of Code Section 416(c) for such years. This paragraph amends paragraphs of this ARTICLE XIV, including, but not limited to, part or all of Paragraphs 14.2, 14.7(a)1 and (a)2, and 14.8(c)3.
Modification of Top Heavy Rules. (a) This Subsection 12.11 shall apply for purposes of determining whether the plan is a top-heavy plan under Section 416(g) of the Code for Plan Years beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements of Section 416(c) of the Code for such years. This Subsection 12.11 amends Section IX of the Plan.
(b) Key employee means any employee or former employee (including any deceased employee) who at any time during the Plan Year that includes the determination date was an officer of the Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the Employer having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a key employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.
(c) This Subsection 12.11(c) shall apply for purposes of determining the present values of accrued benefits and the amounts of account balances of employees as of the determination date.
(i) The present values of accrued benefits and the amounts of account balances of an employee as of the determination date shall be increased by the distributions made with respect to the employee under the Plan and any plan aggregated with the Plan under Section 416(g)(2) of the Code during the one year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than separation from service, death, or disability, this provision shall be applied by substituting 5-year period for 1-year period.
(ii) Employees not performing services during year ending on the determination date. The accrued benefits and accounts of any individual who has not performed services for the Employer during the 1-year period ending on the determination date shall not be taken into account.
Modification of Top Heavy Rules. (a) This Section 22.5 shall apply for purposes of determining whether the Plan is a Top-Heavy plan under Section 416(g) of the Code for Plan Years beginning after December 31, 2001, and whether the Plan satisfies the minimum benefits requirements of Section 416(c) of the Code for such Plan Years. This Section 22.5 amends the preceding provisions of this Article.
(b) This Section 22.5(b) shall apply for purposes of determining the present values of accrued benefits and the amounts of Account balances of Employees as of the Determination Date.
(1) The present values of accrued benefits and the amounts of Account balances of an Employee as of the Determination Date shall be increased by the distributions made with respect to the Employee under the Fund and any plan aggregated with the Fund under Section 416(g)(2) of the Code during the one-year period ending on the Determination Date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Fund under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting 5-year period for 1-year period.
(2) Employees not performing services during the Plan Year ending on the Determination Date. The accrued benefits and accounts of any individual who has not performed services for the Employer during the 1-year period ending on the Determination Date shall not be taken into account. Index
Modification of Top Heavy Rules. The top heavy requirements of Section 416 of the Code and of Article XVI of the Plan shall not apply in any year in which the Plan consists solely of a cash or deferred arrangement that meets the requirements of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met.
Modification of Top Heavy Rules