Safe Harbor 3% Plus 2% New Comp - Does that count as a 5% Gateway?

[Guest LKHartnett]

I was really hoping I would find the answer to my question nested in the multi-page "Gateway" thread that ran for over a year! But it didn't . . .

We are putting together a Safe Harbor 401(k) with a 3% SHNEC. We are supplementing with a New Comp allocation. Let's just say that it is possible to pass cross-testing if we give each NHCE a 2% contribution, but, that the 2% is less than 1/3 the highest HCE allocation . . . can we combine the 3% Safe Harbor contribution with a 2% New Comp contribution to arrive at our Gateway minimum?

[AndyH]

Yes, if under the terms of the document the result is 5%.

[Guest LKHartnett]

Wow, so, the document should specify that the New Comparability allocation will meet a Gateway Minimum Requirement when taken with the SHNEC?

We have wording that discusses the Gateway Min, but it doesn't specifically point to the SHNEC as another source for this minimum. Should I specifically point to the SHNEC?

[Tom Poje]

interesting thought.

a document has to include language for top-heavy.

I do not believe there is or wiould be any requirement for the minimum gateway.

consider a cross tested plan (pre-gateway rule)

there is nothing in the document that specifies passing the cross-test, but you modify the contribution to make sure it does. I would think the gateway falls into the same category.