SH Cnt & Otherwise Excludable Employees

[Guest LoloV]

What kind of documentation is needed in order to exclude "Otherwise Excludable" employees from a Safe Harbor contribution? Should it be in the document or Safe Harbor Notice? Plan calls for immediate deferral eligibility and 1 YOS, age 21 for PS and Match.

Thanks!

[Tom Poje]

both.

The notice is a reflection of what is in the document.

I suppose the only exception would be if the plan was doing the 'maybe' SHNEC.

in that case the notice would reflect what the plan 'might' do - the SHNEC is not in the document at that time.

[Guest f1234]

A top heavy 401(k) plan has a permitted disparity allocation formula and a safe harbor match. The plan's entry date for salary deferral and for the safe harbor match is the first day of the month following employment. The employer's discretionary allocation requires the completion of age 21 and 1 Year of Service.

All employees, who have entered the plan, will receive at least the 3% minimum, either directly through an employer contribution, through the safe harbor match, or a combination of the two sources. The employer is also making a discretionary contribution to maximize the owner.

Of the employees, who met the age 21/1 Year requirement, 87% benefit under the permitted disparity formula. If the employees, who do not meet the age 21/1 Year are included, coverage fails the percentage test, since they receive the top heavy only. Can this second group be disaggregated for testing purposes?