S% safe harbor 401K Plan plus cross tested profit sharing allocation - with a participant who enters on 7/1/03

[Guest rffahey]

I have a 3% safe harbor 401k plan with dual entry dates of Jan 1 and July 1.

The doctor puts in $12,000 salary deferral and gets 28,000 safe harbor/cross tested profit sharing allocation.

Another employee who started 3 years ago is in for the full year and gets the 3% safe harbor on full year compensation and 3.8% additional profit sharing to pass discrim testing.

The last employee started 6/1/02 and enters the plan on 7/1/03. Does she get the 3% safe harbor on the full year compensation or only on comp earned while a participant ? Same question for her 3.8% allocation for the cross tested profit sharing piece ( full year comp or from 7/1/ to 12/31 ) ??

Thanks

[Tom Poje]

the document should say what period of compensation to use. look under definitions. I suppose its possible the safe harbor notice might say what period of comp to use for the safe harbor. I would doubt it is different from the plan, but one never knows.

for the sake of argument, lets assume date of participation.

then ee gets the 6.8% from date of participation or 3% of total comp since the plan is sure to be top heavy.