Guest Hunter401k Posted December 9, 2016 Share Posted December 9, 2016 I am taking over a Plan who allows everyone to contribute to the 401(k)/Safe Harbor portion of the Plan. However it is only the salaried employees eligible for the Profit Sharing portion (it's about 50/50 as to salaried and hourly employees). Am I wrong to think that the Profit Sharing portion also needs to simply pass the 70% test on it's own? Thanks for your help in advance! I just want to be sure. Link to comment Share on other sites More sharing options...
duckthing Posted December 9, 2016 Share Posted December 9, 2016 Yes, the 401(a) component can pass the ratio test for coverage separately from the other components. If any of your hourly employees happen to be HCEs (overtime?) that should help quite a bit! Is the safe harbor arrangement a match or a nonelective? Link to comment Share on other sites More sharing options...
Mike Preston Posted December 9, 2016 Share Posted December 9, 2016 There is nothing preventing you from establishing compliance with 410(b) by way of the Average Benefits Test. austin3515 1 Link to comment Share on other sites More sharing options...
Stash026 Posted December 12, 2016 Share Posted December 12, 2016 duckthing - I believe it is a Safe Harbor Match. Everyone is eligible, assuming the reach Eligibility (21 & 1).They want to add the Profit Sharing, so working out the testing separately. Initially they only wanted to cover the salaried employees, but there aren't enough non-highly to pass the 70% coverage Link to comment Share on other sites More sharing options...
austin3515 Posted December 12, 2016 Share Posted December 12, 2016 There is nothing preventing you from establishing compliance with 410(b) by way of the Average Benefits Test.[Full disclosure: This response was plagiarized]. Doghouse and Mike Preston 2 Austin Powers, CPA, QPA, ERPA Link to comment Share on other sites More sharing options...
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