FAQ 533: Allocations--Top heavy minimum only for one participant instead of integegrated contribution


I am allocating a $100,000 contribution in this plan, and Mr. Smith is over the social security wage base of $87,900 for the plan year, but he is not receiving anything but the top-heavy minimum contribution. His allocation base is accurate, but it is still not working. I have attached a portable copy of the plan.


In the case of Mr. Smith, the 3% top-heavy minimum contribution of $2,813.64 would be greater than his standard allocation under the integrated formula, so he receives the top-heavy minimum instead. Here are the two allocations:

Top-heavy minimum - 3% x $93,788.14 = $2,813.64

Standard allocation -
2.813% in excess of $87,900 = $165.63
2.813% x $93,788.14 = $2,638.26
Total allocation = $2,803.89

So, in this case, he receives the top-heavy minimum only, as the standard allocation would not meet the top-heavy minimum requirement.