A profit sharing plan has a 401(k) feature effective as of 4/1/03, and the plan has also adopted the safe harbor 3% NEC for 2003.
My question is can we make safe harbor contributions for only the period during which the 401(k) is active? For example, can we exclude people who terminated at the beginning of the year from the safe harbor contribution?

What does the plan doc say regarding eligibility for the safe harbor 401(k) arrangement, e.g., all employees employed as of 4/1/03 are eligible, 1 yr/age 21 requirement? I typically have it such that all employees employed as of date X are eligible. That way it's clear who's in and who's not.


The above was in response to your "for example,...". However, if your question concerns what compensation to base the safe harbor on, then see

http://www.benefitslink.com/boards/index.p...t=0&#entry80576

Basically, unless the doc. says one way or the other, you can go with full year comp. or comp. from 4/1/03 to 12/31/03.