MURPHY

Thanks everyone for the help I was trying to get some info on Safe Harbor/Testing before I called HR below is what HR said. Safe Harbor plans have some additional rules then other plans and the simple answers is one of the requirements of a safe harbor plan is the employer has to contribute (according to some guidelines) to the employees plans and since not all CBAs require employer contributes to the plan (or required limits) and not every employees receives an employer contribution in the union plan it does not meet the all the requirements for safe harbor.

Thank you for your reply CuseFan, yes last year I was returned about 10,000 because I was an HCE after testing. Is there a reason why the employer would not go for the safe harbor option for the union employees like they do for the nonunion employees?

Thanks Pual, for the replay. In my situation my employer runs the 401-k for the union and nonunion. The union has nothing to do with it. The problem I'm having when I max out my employer contribution and I max out my contribution then when the 401-k dose there testing I will have to take a portion of money back out due to the testing results. Any way around this? The Internal Revenue Code requires that 401(k) plans be tested annually to demonstrate that contributions to the plan do not discriminate in favor of highly compensated employees (HCEs). The non-discrimination tests limit the amount of contributions that HCEs may make or receive under a 401(k) plan, based on the average percentage of contributions made by or on behalf of non-highly compensated employees who are eligible to participate in the plan. Annual testing is performed after the close of each plan year. Based on the results of these required nondiscrimination tests, HCE contributions may need to be reduced. Testing the plan retrospectively and distributing excess contributions after the end of the plan year ensures that the contributions made or received by HCEs for the plan year equal the maximum amount permissible under the law.

Why would a company offer safe harbor for nonunion employees and not union employees?