safe harbor deemed not top-heavy

[Guest ERIC STRAND]

Under EGGTRA, safe harbor Plans will not be subject to top-heavy testing if the contributions are limited to deferrals, safe harbor contributions, and matching contributions that satisfy the ACP safe harbor. Does this mean that they can have a discretionary matching contribution, subject to vesting, on top of the SHMAC? I believe you satisfy the ACP safe harbor if the discretionary match is in amounts not exceeding 4% of salary and if no match is made on deferrals that exceed 6% of salary. What exactly can a safe harbor Plan contribute and still not be subject to top-heavy testing? What if there is a discretionary profit-sharing or after-tax provision that is never used?

[Tom Poje]

Eric, at this point no one knows for sure what happens if you have a profit sharing feature you don't exercise. or for that matter, what happens if there are forfeitures from old profit sharing money?

Yes, you can have both a SHMAC and a discretionary match, as long as you impose the limts you indicated on the discretionary match.