ACP/ADP testing needed in safe harbor plan?

[Guest lhinson]

I have a plan that currently has dual eligibility - no service or age requirement for deferrals, one year and age 21 for match. They are thinking of changing to safe harbor in 2005, and making the tiered safe harbor match. Does the dual eligibility cause any type of problem with satisfying the safe harbor?

[Tom Poje]

no, that is an option permitted under the rules as we know them.

However, you do not get the free ride on top heavy (if there are no other contributions)

in other words, you would have to provide minimums if the plan was top heavy.

[MWeddell]

You also have to test separately the group of employees who are less than age 21 or haven't attained the one year of service (including any entry date assumption you make up to semi-annual entry dates). This group doesn't usually have an HCEs, so it is unlikely to be a problem.

[Guest lhinson]

Thank you, that is just what I needed. I thought I remembered something like that, but couldn't remember exactly.

[Guest philc]

Check the document because the Prototype we use requires the safe harbor contribution (Match or SHNE) to be made to anyone who is eligible to make deferrals.