My client, with owner and wife, and another HCE (makes $150,000), is setting up a DB plan in which only the owner and wife can participate. They have an existing 401(k) plan that is NOT top heavy right now.

The new DB plan will make the combined plans top heavy. They are planning to hire another HCE (at least after he earns $90k in a calendar year), but do not want him in the DB plan either, nor do they want to give TH contributions to the HCE's.

Can they set up a new 401(k) plan in which only non-shareholders can participate, that will not be aggregated with any other plans for top heavy or for coverage, such that Top Heavy minimums will not be required?

The owner and his wife will not contribute to either 401(k) plan when the DB is set up.

Sure can. If the plan isn't part of a required aggregation group and it has no key employees that participate in it, then it isn't top-heavy.

Thanks Mike. I enjoyed your session at the ASPA conference. Keep up the good work.

Sorry for posting this question under the wrong Topic/Subject. Glad you found it.

If the Non-owner HCE has balances in both plans (the old and new), but is only contributing to the new, I am not required to aggregate, am I? That only applies to Key ee's correct?

Correct. Aggregation is only required based on key employees, not HCE's.