Are "safe-harbor 401(k) plans" really 100% vested

[Moe Howard]

Employer has a 401(k) safe-harbor plan.

Three kinds of contributions go into the plan.

1) Elective deferrals (withheld from employees' paychecks).

2) Required 3% employer match (required for safe-harbor status).

3) 11% employer discretionary contribution to profit sharing plan.

I realize that 1) & 2) are immediately 100% vested. But what about 3) ?

So, my question is .... Does a discretionary contribution to a profit sharing plan have to be 100% immediate vested, just because the profit sharing plan happens to have a "safe-harbor 401(k) feature" ?

[Archimage]

No it does not have to be 100% vested. Your match formula is not a safe harbor match. You must have a minimum of 100% of the first 3% and 50% on the next 2%. The addition of the the profit sharing contribution will make the plan subject to top heavy rules.

[Tom Poje]

I would assume the terminology used is incorrect.

point 2 is probably not a match, but rather a 3% SHNEC. Therefore the plan satisfies safe harbor.

Otherwise Archimage is correct, if the 3% was a match, the plan does not satisfy safe harbor.

In that case, at least 3% of the discretionary would have to be treated as a SHNEC - at 100% vesting.