Jump to content

Safe Harbor Plan with Relaxed Entry for 401k


CLE401kGuy

Recommended Posts

FACTS

  • Plan is top heavy
  • Plan entry has immediate entry for 401k, 1 yr and age 21 for profit sharing source
  • Plan is safe harbor

Any participant who entered the plan immediately for 401k but did not yet meet the eligibility requirements for profit sharing and is not terminated is subject to receiving top heavy minimum.    Is the top heavy minimum given to these individuals as safe harbor or profit sharing?    Thanks

Link to comment
Share on other sites

profit sharing.

think of it this way. maybe not the best way to imagine it, but what the heck. you have 2 plans.

plan 1 is safe harbor with a 1 year wait

plan 2 is non safe harbor, no wait for deferrals. but since the folks are now participants they get the top heavy

Link to comment
Share on other sites

What's the eligibility for safe harbor? Does it follow the deferral eligibility and entry? or the Profit sharing? the fact pattern doesn't say. 

What kind of safe harbor? nonelective? match?

We have some plans that have the safe harbor follow deferral eligibility, and others that have safe harbor eligibility the same as profit sharing. 

I'm a stranger on the internet. Nothing I write is tax or legal advice. 

I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...