Which of these statements regarding a top-heavy plan is false? A top-heavy defined benefit plan must provide accelerated vesting A top-heavy plan is one that provides more than 50% of its aggregate accrued benefits or account balances to key employees A top-heavy defined benefit plan must provide a minimum benefit accrual of 2% multiplied by the number of years of service (up to 20%) For a top-heavy defined contribution plan, the employer must make a minimal contribution of 3% of annual covered compensation for each eligible non-key employee. If the contribution percentage for key employees is less than 3%, the contribution percentage to non-key employees can be equal to the key employees' percentage
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A top-heavy plan is one where more than 60% (not 50%) of the aggregate accrued benefits or account balances are attributable to key employees. Show more…
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