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Showing results for tags '3%shnec'.
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Safe Harbor 401k Profit Sharing Plan provides: 401k+Catch-up for all 3%SHNEC for all NHCEs only Discretionary PS, each Participant own rate group 25 HCEs, 2 are owners 100+ NHCEs Employer would like to contribute the following: 2 owners 9% PS Remaining HCEs 1% PS (Plan is NOT TH) NHCES only the 3% SHNEC, 0% PS -- this satisfies the G/W minimum Can this be done or must the NHCEs receive "some amount of" PS?
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We are looking into taking over the third party administration of a plan that currently has a QACA that utilizes the 3% non-elective contribution safe harbor method that vests after two years of vesting service. We are exploring changing the ADP safe harbor method to traditional 3% non-elective which is 100% vested immediately, but if the administrator is already successfully administering the QACA, I am thinking this may not be in their best interest? I think my question is, "is the ability to administer the QACA properly the only difference between a two year difference in vesting requirement, or are there other considerations?" A two year vesting schedule seems like a huge benefit for a small trade-off. The end goal of the program design is to add nonsafe harbor non-elective contributions to the plan and potentially also adopt a DB plan, I want to use the QACA safe harbor contributions towards top-heavy and 401(a) testing if i can, and if it makes sense to continue to maintain the QACA. -
Cross Tested Plan, 3% SH non, Top Heavy, Semi Entry at 4/1 and 10/1 I have an employee with a legitimate participating compensation of 163.01. Participant was eligible 4/1 and terminated 4/5. Employee is entitled to 3% safe harbor and then a 2% profit sharing for the year. So the Gateway 414(s) compensation would show 163.01 with a 401a allocation of 8.15. So I need to check to make sure the employee is receiving at least 3% compensation on full year comp for top heavy status. Employee need 516.80 additional funds to receive top heavy minimum. Full year comp was 17,498.33. So here is the rub and the question. The benefit percentage of the employee in question would be like 300% plus based on the 524.95 401(a) total and compensation of 163.01. Would you leave it this way? Or do something different? On this plan, there are generally 2 to 3 employees that come in mid year and need a top heavy minimum. Where everyone else would show a benefit percentage of 5%, the 2 or 3 might show as 5.8%. Gateway then passes, and then I go to the next steps of making sure the other test pass. I just haven't seen a legit participating comp scenario skew the percentage this wildly. Thanks
