Potential Top Heavy Issues Related to a Safe Harbor 401(k) Freeze or Termination

We have discussed conflicting survey results, one of which found that the Majority of Employers are Maintaining or Increasing Their 401(k) Match and others that found that Employers are Cuting their 401(k) Match. We have also recently blogged about reducing or eliminating matching contributions in the following posts:

• Eliminating or Changing a Fixed Matching Formula
• Mid-Year Safe Harbor Changes: Freezing or Eliminating the Match and Using the Maybe Nonelective Notice
• Reducing or Eliminating Safe Harbor Matching Contributions
• Conditional Safe Harbor Notice

There is another factor to consider in making the decision is the top heavy test. A safe harbor 401(k) plan will lose its top heavy exemption if it doesn't qualify as a safe harbor plan for the entire plan year. Watch Out for Top-Heavy discusses the potential top heavy issues that a plan may face when reducing or terminating a safe harbor 401(k) plan:

• Can a safe harbor 401(k) plan be exempt from the top-heavy rules?
• If an employer amends mid-year a safe harbor 401(k) plan that qualifies for the top-heavy exemption to eliminate or reduce ("exit") the safe harbor match, will the plan lose its top-heavy exemption?
• If an employer terminates mid-year a safe harbor 401(k) plan that qualifies for the top-heavy exemption, will the plan lose its top-heavy exemption?
  If an employer freezes a safe harbor 401(k) plan mid-year, will the plan be able to cut off the compensation on which the plan calculates the top-heavy minimum contribution as of the freeze date?
• What is the difference between freezing a safe harbor 401(k) plan and terminating the plan?
• If an employer terminates a safe harbor 401(k) plan mid-year, will the termination cut off the compensation on which the plan calculates the top-heavy minimum contribution as of the termination date?
• If an employer terminates a 401(k) plan (including a safe harbor plan), when is the earliest date the employer can establish another defined contribution plan (e.g., 401(k) plan)?