C. B. Zeller

The plan is deemed not top heavy only if the safe harbor matching contribution is the only employer contribution. The minute you add in a dollar of discretionary profit sharing, the top heavy minimum is required. As Tom said, the safe harbor match does count towards the 3% top heavy minimum.

Re-reading the reg I agree that the 30 day period is required regardless of whether the employer is experiencing an economic loss. 1.401(k)-3(g)(1)(i)(A) states: which would seem to imply that the 30 day wait is only required if the reduction or suspension is happening in accordance with a provision in the annual notice. However 1.401(k)-3(g)(1)(i)(C) goes on to say: It seems a little odd that the regulation would specify 30 days in (A)(2) but not (A)(1) even though it applies to both. But such is life.

See reg. 1.401(k)-3(g)(1) An employer may suspend or reduce safe harbor contributions mid-year if the plan is amended during the plan year, and provided they meet certain other conditions. Obviously it is too late to amend for 2016 so the employer will have to make the contributions. EDIT: Next paragraph is incorrect. Disregard. For 2017, if the employer is operating at an economic loss as defined in section 412(c)(2)(A) then they may suspend the safe harbor contribution for the remainder of the year, provided they amend the plan on a timely basis.