When Is A Retirement Plan Top Heavy?

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   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   A top-heavy plan is one that benefits company officers, owners, employee shareholders, etc. and/or key employees. If a qualified plan becomes top-heavy, there are top heavy tests that ensure the other employees receive fair to equal treatment with similar benefits under the plan. In general, the basic definition of a top heavy defined contribution plan is when total account balances of key employees exceed 60% of the total retirement accounts.
    

   Answered on September 7, 2013

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