Safe Harbor 401(k) Plan

[Guest Joe Vasko]

I know that a Safe Harbor 401(k) is not subject to ADP/ACP tests, but what if the employer intends to satisfy the safe harbor requirement using a 3% non-elective contribution and also makes a discretionary matching contribution (subject to vesting) in which the only employees who are deferring a HCEs? Does the matching contribution automatically satisfy the ACP test?

Thanks,

Joe

[Tom Poje]

yes.

the 3% non elective satisfies the ADP safe harbor, and the discretionary atch satisfies the ACP safe harbor -though any match above 4% of comp would be subject to ACP test.