Answer: C. provides a disproportionately large retirement benefit to highly compensated key employees that can void the plan's tax qualification
Explanation:
A retirement plan is considered a top-heavy one when 60 percent of the aggregate accrued benefits or account balances are for the compensation of specific key employees. A key employee refers to a person who´s a 5 percent owner of the employer, or a 1 percent owner of the employer with over $150,000 in compensation, or an officer with over $180,000 in compensation from the employer ($185,000 since 2020, and subordinate to cost-of-living changes in the future).
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