FAQ 922: Allocations--Top Heavy Key individual % less than 3% and catch up


Does ASC take catchup into consideration when calculating top heavy minimum, and if the key's are less than 3% will the system automatically adjust to the lower percentage?


The TOPHMINM screen TopHeavy min. % field will need to be manually adjusted for any percent that should be allocated for top heavy purposes. Additionally, the "percent" that must be allocated is not calculated by the system so this requires that you "eyeball" the key's and make a determination of the "highest" allocated percent based on their total contributions/eligible compensation and this percent if less than the current coding should be used to replace on the TOPHMINM screen. If there are many key's I would recommend viewing them in a grid arrangement. Use the following formula's to create the contribution percent and find only the Keys.
Use "Selected Employees" with a Formula Expression to show KEYIND="Y" and this will eliminate anyone who is answered N=No as Key Individual.
The formula to use for all source contributions divided by Current Limited Compensation is as follows the last number (6) is how many digits right of the decimal:

Once the correct TH min. percent is posted to the TOPHMINM screen and if you run the compliance tests, 402g, plan limits and 415(c) prior to allocating contributions the catchup will be "removed" and is no longer represented on the CONTRIB screen. The system will use the CONTRIB screen #'s to determine and allocate the top heavy min. percent coded. As long as the catchup is moved prior to the top heavy allocation then only the remaining contribution amounts on the CONTRIB SCREEN for Key's (even if it ends up being 0) will be considered for the top heavy purposes (catchup money is disregarded for top heavy). Reference Pension Answer book's Q26:41