bobbyM35

Thank you all for your assistance and responses! My former employer has insisted that they have discretion whether or not to pay HCEs (although they have not provided the justification nor shown me verbiage in the SPD when I requested). They have agreed to pay me as a "one-off exception". I'm not going to pursue the matter further if they provide the contribution, but it doesn't seem right to me.

I don't think I was provided the annual safe harbor notice. I was only provided the SPD.

Here is the verbiage I could find in the SPD that treats contributions to HCEs. I don't see anywhere in this that they can discriminate between active / non-active HCEs, but I could be wrong. Your Employer may make discretionary nonelective contributions in an amount to be determined by the Board of Directors for each Plan Year. a. Ratio of Compensation Formula Nonelective contributions, if any, made to the Plan by your Employer shall be allocated to your Account based upon the ratio that your Compensation bears to the Compensation of all eligible employees within the group of eligible employees to which you belong. Each employee will be considered his or her own group. For additional information regarding the computation of this benefit, please contact the Plan Administrator.

Apparently, the HCE rule is the issue they are using This was the company's response: Under the rules, the Employer is required to make certain minimum contributions to each of the NHCEs but is allowed total discretion on the amount, if any, to be contributed to each of the HCEs, as long as the Employer Contributions are not discriminatory against NHCEs in favor of HCEs. Using these rules, guidelines and discretionary judgment, (Company) determines the Employer contributions. It has been (Company)’s general practice to limit Employer contributions to those HCEs who continue to be employed at (Company) at the time the contributions are funded. The 2017 contributions have not yet been funded to any of the participants yet. Can they discriminate between out of service and in service HCEs? I know they plan on giving HCEs their SHNE contribution. Do I have any recourse here?

Yes I did. Is that a basis for exclusion? If so, can they selectively exclude on that basis? If other highly compensated employees are receiving a SHNE contribution could they exclude my contribution on that basis?

I may not have been clear on this. They are making safe harbor payments to employees for 2017 service; I have confirmed this with other current employees. They have just told me that they would not be making a contribution to my account. I plan on trying to get clarity on why they think that is justified. I don't know what plan requirements are for payment to recipients, if that is administered by ERISA/IRS requirements. If there is a % of work year worked requirement or something along those lines. Basically, I would like to be educated in what the laws are for paying an ex-employee the safe harbor non-elective payment going into any conversation we have. And no, I did not receive a notice that the company would not be paying a 2017 safe harbor election.

I left a company in September 2017. Their practice was to pay Safe Harbor non-elective payments to 401k plans the year after service. I contacted them recently to find out when the contribution would be made to my 401k plan for my 2017 service and they told me that no further contributions were expected to be made into the account. So essentially I received no contribution for my 2017 service. My question is, what recourse do I have in this situation? I checked my SPD and the only verbiage I could find on the payment is the following: "Your Employer will make Safe Harbor Nonelective Employer Contributions to all eligible Participants who are Non-Highly Compensated Employees if you were eligible to participate in the Plan during the Plan Year. These contributions satisfy certain Internal Revenue Code requirements and eliminate the need for the Plan to perform certain non-discrimination annual tests. You will be 100% vested in these contributions when made. These contributions may be distributed under the same circumstances which allow your Deferral Contributions to be distributed (i.e., death, disability, separation from service, and termination of the Plan without the establishment of a successor plan) but you may not request a hardship withdrawal of these contributions. In addition, prior to the beginning of each Plan Year for which this election to make Safe Harbor Nonelective Employer Contributions continues to apply, the Plan Administrator will provide written notice to you describing your rights and obligations under the Plan and informing you that the Plan may be amended during the Plan Year to provide that the Employer has elected to make a Safe Harbor Nonelective Contribution of at least 3% to the Plan for the Plan Year." What are annual requirements necessary to qualify for Safe Harbor Nonelective contributions? I would think service through September should be sufficient. Is it a % of the year worked, something else? TIA for any help.