The comp threshold for officers that are key employees increases from $130,000 to $135,000 in 2005. The 2005 top-heavy test will be done 12/31/2004 based on ending balances and census data for 2004. Do I use the new $135,000 officer comp limit since it is technically the 2005 test? What about start-ups in 2004? Do I use the old limit for the 2004 test and the new limit for 2005, similar to how we did things for 2001 start-ups due to EGTRRA changes effective in 2002?

I would not call it the 2005 test. It is the 12-31-04 Plan Year End test. It tells us whether or not we need to jump through certain hoops the next year based on Top Heavy Status or not. If you look at it this way, it is easier to remember to use the $130,000 for 2004.


(Of course, if this is the first Plan Year, it tells us what hoops we have to jump through for 2004).

Isn't it used in the new 6 month distibution provision of 409A? For 2005 we use $135K for 409A, right?