PensionNewbee Posted January 21, 2004 Posted January 21, 2004 Can a non-top-heavy plan have a safe harbor non-elective contribution of less than 3%??
ccassetty Posted January 21, 2004 Posted January 21, 2004 If you are talking about the 401(k) safe harbor rules, the non-elective contribution has to be 3%. Or, the plan could do the safe harbor matching contribution instead. Either way, if only the safe harbor contributions are made, the plan doesn't have to worry about top heavy. Carolyn
PensionNewbee Posted January 21, 2004 Author Posted January 21, 2004 I've got a plan with an exempt group and a non-exempt group. They want one plan but have different benefit levels in mind for each group. there are about 85 exempt, 20 of which are HCEs. the other group has about 900 people. (non-union). They want to give the nonexempt a 2% profit sharing contribution, let them defer and not match. The exempt get to defer and get a match but no PS. Safe harbor isn't an option?
Blinky the 3-eyed Fish Posted January 21, 2004 Posted January 21, 2004 The safe harbor will not do what you want here, but keep in mind that the reason to do a safe harbor is to allow for the ADP and/or ACP testing to pass. Is that the motivation here? "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
PensionNewbee Posted January 21, 2004 Author Posted January 21, 2004 It's not the driving motivation - what we're trying to do is set up a plan with different benefits for different groups, and find a way for it to pass testing- coverage, etc.
Blinky the 3-eyed Fish Posted January 21, 2004 Posted January 21, 2004 Newbee, okay the one group has 20 HCE's and 65 NHCE's. What about the 900 life group? And are either of these groups union employees? "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
PensionNewbee Posted January 21, 2004 Author Posted January 21, 2004 neither group is union. they want to divide along exempt and non-exempt status.
Blinky the 3-eyed Fish Posted January 21, 2004 Posted January 21, 2004 There are 2 questions I posed. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
PensionNewbee Posted January 22, 2004 Author Posted January 22, 2004 there are NO union employees. Just salaried (exempt) and hourly (non-exempt). The exempt employees are one group, the non-exempt are the other group. The exempt group has the HCEs. The non-exempt has no HCEs. The exempt group is getting a different benefit than the non-exempt group.
Blinky the 3-eyed Fish Posted January 22, 2004 Posted January 22, 2004 The non-exempt has no HCEs. This is the answer to the first question. You did NOT need to repeat the answer to the second question as if I was asking it again NOR did you need to repeat the items you stated before. Oops, I am busy now and will have to get back to you later on this. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
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