pbarrett Posted February 27, 2004 Posted February 27, 2004 If a client sets up a Safe Harbor 401(k) using the 4% match formula for 2005, both the acp/adp tests are passed, correct? Example- 2 owners 10 particpants. Owners defer and one participant defers. If the 4% match is given, auto passage of both the adp and acp test, right?
R. Butler Posted February 27, 2004 Posted February 27, 2004 Assuming the plan meets the requirements of IRS Notice 98-52 (also see IRS Notice 2000-3), the plan is not subject to the ADP/ACP nondiscrimination test. There are more requirements than just providing a 4% match.
Brian Gallagher Posted February 27, 2004 Posted February 27, 2004 With the SH Match, consider Top Heavy, too. Will there be any other contributions? (Profit Sharing or Reallocated Forfs) If there are, you may need to provide a Top Heavy Minimum contribution. Remember: two wrongs don't make a right, but three rights make a left.
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