RAPD

Thank you Effen, that was exactly the type of info i was looking for. and thanks for offering to assist offline, i may take you up on that, how can i obtain your contact info?

One of our current plans is asking about the possibility of adding a Cash Balance to their existing Safe Harbor 401(k)/Profit Sharing Plan. They are a medical practice with 115 participants. 10 Doctors and 105 non highly's. They currently have a SH Match with a Profit Sharing in place to maximize the Doctors allocation. They are wondering if it would be possible to add in a Cash Balance plan for the Doctors as they wish to put away a higher annual contribution. I do not have much experience with CB plans so i am wondering if this is possible? And if so how many of the NHCE's would need to be included in the CB? Also of note, they may be merging with a group of 4-5 other medical practices a couple of years down the road possibly becoming a controlled group. The other practices have plans in place however I don't know if any of them are CB plans. I know that they all have 401k plans in place but i don't know if any of them have CB plans as well. What type of issues if any could arise in this situation?

This way, the HCEs are getting a bigger SH than the rank and file. What about that DOESN'T scream discrimination? Just to play devils advocate... It's not discriminatory because the NHCE's have the opportunity to defer and receive the SH Match as well as the 3% if i understand this correctly. Or whichever is greater?

Volume Submitter

I'm reviewing a plan that seems to be designed this way and so i am questioning what the reasoning was behind this design. There are 4 participants total, 2 HCEs and 2 NHCEs. The HCEs are the only one's deferring and they are deferring the max and getting the 4% match. They are not receiving the 3% SH non-elect. They are also getting a small profit sharing contribution. The NHCEs are not deferring but are being provided with the 3% SH non-elective plus a 2% profit sharing.

Is it possible to design a plan using a Safe Harbor basic match for anyone who is contributing and also simultaneously use a Safe Harbor non-elective for anyone who does not contribute?