Hi
There is an ongoing discussion in one of the companies I work with. They are evaluating moving from a SIMPLE 401k plan to a Safe Harbor plan, to ensure that the compliance tests are passed and to enable a possible Mega Backdoor Roth plan. I have been able to simulate the tests and with the Simple 401k plan, the ACP falls into non-compliance quite quickly. However, I've done some research and found that Safe Harbor plans offer some type of waiver over tests. But I've also found that after-tax contributions do not qualify for safe harbor test exemption, meaning that even when the company adopts a safe harbor strategy, it is very likely we would fail the ACP test. Can someone help me confirm if safe harbor plans with after-tax contributions are subject to ACP testing? (and, why are they called safe harbor if they are not entirely safe?). Thank you so much for your help!
FR
