Guest AngelB Posted October 24, 2001 Posted October 24, 2001 We're considering implementing one of the safe-harbors. We have a union environment. What experiences have you had using one of the safe harbors? Any plusses or minuses you can share with us? What landmines should we look out for?
MWeddell Posted October 25, 2001 Posted October 25, 2001 Just to point out the obvious, the whole point of complying with the 401(k) safe harbor is to avoid discrimination testing. If there's no highly compensated employees, i.e. if no union employees are expected to earn $85,000 or more indexed for inflation, that no need to comply with the safe harbors. I've had a couple clients put in safe harbor matching formula including for union employees. No landmines to warn you about. Obviously it's an additional cost (including the 100% vesting) that the employer will need to present during negotiations.
Guest AngelB Posted October 25, 2001 Posted October 25, 2001 Thanks for the reply. Several of our union employees are HCE's because of OT and we have problems sometimes with Non-D tests. Also, we are all 100% vested from Day One, so I don't expect that aspect to increase expense. I guess what I was looking for was more along the lines of negotiating the change, acceptance by employees, and in terms of plan administration.
Tom Poje Posted October 25, 2001 Posted October 25, 2001 ok. you are an employee. under safe harbor there is no hours requirement, no last day requirement. your prior plan may have had these restrictions. which would you want? this sounds like a no brainer from the employee point of view..
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