Safe harbor match, employees excluded from match only

[Belgarath]

Maybe I'm missing something - can a 403(b) plan allow a certain class of employees to defer, but exclude them from the safe harbor match? I didn't think so...

[Kevin C]

You're not missing anything. You can't do that and satisfy the ACP safe harbor.  The ACP safe harbor match rules send you to the ADP SH match provisions so each NHCEs eligible to defer has to receive the SH match.  You would also have a problem with the match restriction in 1.401(m)-3(d)(4).

 

 

 

[Pam Shoup]

What type of entity sponsors the plan?  501(c)3, steeple church, school, etc.?

[Belgarath]

Thanks Kevin - that's the same answer I had come up with.  Ran across a plan that has this, so wondered if I was missing something...

 

Pam, it is a 501(c)(3).

[MWeddell]

There is a limited exception to the conclusion reached so far.  Those who have not attained age 21 with one year of service can be allowed (and likely must be allowed due to the universal availability rule) to make 403(b) deferrals but can be permissively disaggregated for 401(m) purposes and not allocated the safe harbor match.

[Belgarath]

Yes, thanks. I had considered that, but it doesn't apply in this plan. I appreciate your taking this extra step.