ACP test - safe harbor 401k plan

[jaemmons]

Plan uses 3% non elective to satisfy safe harbor adp test requirements. No matching contributions are made, but there are employee after-tax contribs. I looked through the final 401k regulations and did not see anything which superceded Notice 98-52. in that the employee contributions must be tested using the current year testing methodology. Does anyone agree/disagree with this conclusion?

Thanks

[Guest Bob K]

I agree with your conclusion.

Safe Harbor plans are considered to be using the current year testing method.

1.401(m)-3(j)(6) of the new regulations states that "If the plan provides for employee contributions, in addition to satisfying the requirements of this section, it must also satisfy the ACP test of 1.401(m)-2.

Hope this helps.

Bob

[jaemmons]

Thanks Bob!