3% Non-Elective Contr.

[Guest penman]

I have a potential client that wishes to install a DB plan for 2003. The DB contribution would exceed 25% of total payroll. The company has one owner and one employee. The problem is there is an existing 401(k)/PS plan which has a safe harbor 3% non-elective contribution. The 401(k)/PS plan is a calendar year plan. The intention is to turn the 401(k) plan into a deferral only plan once the DB is adopted. Is there any way to amend out the 3% safe harbor requirement for 2003 or at least have the owner waive the 3%? Any input is appreciated.

[Guest Richard Scheer]

(1) Was the SH notice a "maybe" notice? If so, then they can decide not to be a SH Plan for 2003. Of course, the Plan will then be subject to the ADP test.

(2) Does the Document provide for SH contributions to all participants or only NHCE?