Is Top-Heavy Testing Top of Mind?

Normally, if something is easy in a cash balance plan, it means you’re probably doing it wrong.

At least that’s what David J. Kupstas, MSPA, Actuary, Actuarial Consulting Group, Inc., says. And if you don’t believe it, he admits to being a bit surprised that determining the top-heavy ratio in a cash balance plan is easier than you might think.

“The thing about the top-heavy rules is they are like so many other rules in that they seem like they should be simple but they aren’t,” he explains – and though many would say the top-heavy rules could be repealed and society would be no worse off, “until that sweet day comes when they are repealed, we have to live with the top-heavy rules and follow them.”

Indeed, while after 35 years, one might think this has all been sorted out – well, not so much.

Let’s face it, a session titled “Advanced Look at Top-Heavy” wouldn’t seem to be a powerful draw – particularly at 8 o’clock in the morning. But Kupstas says that attendees could play a drinking game at the 8:00 a.m. session – taking a swig of coffee every time he says, “The rules on this are not clear.” 

That said, attendees will have an opportunity to not only ingest caffeinated beverages, but to gain insights on:

• the rules for making top-heavy determinations;
• the rules for determining the amount of top-heavy contributions, and who gets them across different plan types and designs; and
• best practices for satisfying top heavy requirements when plan language is not explicit, particularly in combined plan design.

And – who needs an early morning run, when you can cover topics like:

1. aggregation groups
2. the exemption for safe harbor 401(k) plans
3. a discussion on what to do when the employer has both a DB and a DC plan.

Come check out Workshop #30 – and the rest of the #ASPPAAnnual agenda at www.asppaannual.org.