Safe harbor matching contribution may be used to satisfy the top heavy minimum. Relying on Treas. Reg. §1.416-1, M-19, the IRS concluded that the ADP safe harbor matching contribution could not be used to satisfy the top-heavy minimum contribution. See VIII.C.2. of IRS Notice 98-52. However, EGTRRA §613 amended IRC §416(c)(2) to overrule §1.416-1, M-19, and allow matching contributions (even safe harbor matching contributions) to be used to help satisfy top heavy minimums for plan years beginning on or after January 1, 2002.
Not all participants will get match (or get enough match). Remember that some participants won’t get the safe harbor match (i.e., they don’t defer) or their matching contribution will not be enough to satisfy the entire top heavy minimum contribution liability. In such case, the employer will still need to make additional contributions to satisfy the top heavy minimum contribution, unless there are other allocations otherwise made for such participants to take care of the liability, or the deemed non-top-heavy rule under IRC §416(g)(4)(H).
