Implications of catch-up contributions on the general test and on safe

[JDuns]

Assume a company has two plans (a DB and Safe Harbor 401(k) plan). Does the addition of catch-up contributions have any impact on the safe-harbor status?

I assume that if a plan has only the safe harbor match (100% match on first 3% deferred and 50% match on next 2%) and no excess matching contributions, it doesn't actually matter whether or not the catch-up contributions are matched because it would never apply. E.g, an HCE earning $200,000 or more contributing 5% (and getting the full match) would be contributing only $10,000. Therefore, to max out and make catch-up contributions, he would have to be making un-matched contributions. (Note that I am ignoring potential differences depending on the timing of the contributions during the year). So I conclude that a safe harbor plan can permit catch-up contributions, whether matched or unmatched, without blowing their safe harbor status (and it would be administratively easier to make the contributions matched). Do you agree?

A last aside, any guesses when the proposed catch-up regs might be finalized?