Is it true or false that for first year plans, the top-heavy determination date is the last day of the prior plan year?

For first-year plans, the determination of whether a plan is top-heavy is not based on the last day of the prior plan year, primarily because there is no prior plan year for first-year plans. Instead, the top-heavy determination date is the last day of the current plan year. This means that for a newly established plan, the balance of accounts is assessed at the end of the first plan year to evaluate whether the plan is top-heavy. The concept of top-heavy applies to plans that have a significant concentration of assets in the hands of key employees, and the rules surrounding this are structured around when a plan is in operation and its associated account balances. Consequently, stating that the top-heavy determination date is the last day of the prior plan year is incorrect for first-year plans, making the assertion false.