Does anyone else think that there is an error in the second part of the solution for the "Practical Example of Concepts Learned" in Chapter 7 regarding the top heavy determination? In the first part, they determine that for 2001 (based on the 12/31/2000 determination date) that there are two key employees - Bill & Lisa. Then in the second part, they determine that for 2002 (based on the 12/31/01 determination date) that using the new rules under EGTRRA there is only one key - Bill. It is my understanding that as a "former key", Lisa's account balance would be disregarded in the determination for 2002, but they have included it in the total account balance for all participants & in their calculation. Lisa's balance should not be included, correct?

From your description, I agree with you. The former key would be excluded from both numerator and denominator of the fraction determining the percentage going to keys.

I have not read the actual example.

There is an error with the calculations. An ERRATA sheet is being prepared.