>The Internal Revenue Service (IRS) in Revenue Ruling 2004-13 provided four separate examples for plan sponsors to measure their own plans against in determining top-heavy susceptibility. Every scenario is separately examined and ultimately a determination of the hypotheticals’ subjection to the Section 416 requirements is provided.
>The bottom line in the IRS’ analysis though was the ” determination of whether a plan is a top-heavy plan is made on a year-by-year basis.” So even if the plan meets Section 416 requirements this year, that does not mean the same checks-and-balances do not need to be applied in the future.
A copy of Revenue Ruling 2004-13 can be found at http://www.irs.gov/pub/irs-drop/rr-04-13.pdf .
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