401(k) NOT affect gateway?

[Guest rickw]

This FAQ seems to contradict earlier posts re 401(k) participants benefiting re gateway allocation. Might the distinction be between safe-harbor and regular 401(k)?

The Question: "In a cross-tested 401(k) plan, if a participant is eligible to defer and receives a match, but is not entitled to a profit sharing allocation, would he be entitled to receive a gateway allocation?"

The Answer: "No. PS contributions, elective deferrals and matching contributions separately must satisfy the nondiscrimination testing requirements. Treas. Reg. 1.401(a)(4)-2(b)(iii). The PS portion of the plan is the cross-tested portion. A participant eligible to defer or receiving a matching contribution, but not receiving a profit sharing allocation (including a top-heavy minimum contribution), is NOT benefiting from the cross-tested portion of the plan. Therefore the participant is not entitled to receive a gateway allocation."

Your thoughts? Thanks!

[Tom Poje]

not sure what earlier posts would have been referred to.

The gateway rule is quite clearly, if you receive any type of profit sharing (including forfeiture and top heavy) then you must be kicked up to the gateway. A SHNEQ is still a non elective contribution and those people would have to be kicked up as well, regardless of hours worked or if they terminated.