Safe Harbor Plan vs. Safe Harbor Match

[Guest baconmouse]

Can a plan use a safe harbor matching contribution formula and not be a safe harbor plan? If so, please explain why.

[Belgarath]

Sure. The formula is only one part of the requirements to be a safe harbor. For example, you might not comply with the Notice requirements. So even though your formula satisfies the safe harbor matching formula requirements, you still don't have a safe harbor plan.

[Alf]

Also, the safe harbor match generally (assuming all other requirements are met) allows a plan to satisfy the ADP and ACP safeharbors. However, the plan could have other matching contributions or aftertax contributions that would be subject to ACP testing, so the plan would not be "safeharbor" for ACP.

[Brian Gallagher]

Also, vesting. If you choose to vest the match over time, it wont be safe harbor.

Withdrawal restictions: can't allow in hardship distributions.

[R. Butler]

Withdrawal restictions: can't allow in hardship distributions.

Just to clarify, the restriction against hardship withdrawals would only apply to the safe harbor contributions. Other money sources could still allow for hardship distributions.

[Brian Gallagher]

that's what I ment. Sorry for any confusion.

[Alf]

To clarify the clarification, the withdrawal restrictions apply only to the safe harbor contributions AND normal QNECs.