In order for a plan to be in a required aggregation group for top heavy, each plan must be one in which at least one key employee 'participates' (per ERISA Outline).

Does 'participates' have the same meaning as the coverage rules and all those eligible are 'participants' - even if they choose not to defer and have a $0 balance? Basically, do the key employees have to be specifically excluded in a 401(k) plan document in order to exclude the plan from the required aggregation group? Any cites? Thanks!

Yes. No.

I looked at the regs and I didn't see any answer - do you have site you can point to that defines "participates." It sounds like Participates" essentially equates to "benefitting" under coverage, but why didn't they say that? This was always my understanding but was surprised to see it was not so clear!

I am surprised that something unclear in the code/regs is surprising.

When something isn't specifically defined, it means that which is obvious, if it is obvious. The word being questioned here is "participates". That doesn't seem like a difficult word to understand. If one is a participant in a plan, one satisfies that definition. If they wanted to restrict that definition in some way, by tying it for example to additional requirements such as the 410(b) definition, they could have. They didn't. Hence, the word itself means what it says. If somebody is a participant in a plan that plan is part of a RAG if the key EE status thingy is also satisfied.

I'd say to stop looking for disclarity where only clarity exists.

Is it cold in here?

I hope so.

The controversy behind the interpretation of being a "beneficiary under a Trust" under 404(a)(7) is what I was trying to cynically contrast. I guess it would help to get the words right.




Blinky, you look swell.

Huh? I can't find those words in 416 or 1.416. What am I not understanding?

Andy, that's taboo!! You can't edit a post after someone replies to you! Now Mike's post makes no sense!

Austin,
You are hairy, like an animal!

It is a frequent occurrence that Mike's posts make no sense. No matter.

You should see my teeth...