Safe Harbor

[Guest Mrilaomt]

Does anyone know whether additional contributions to a safe harbor match (pre-tax) blow-up the SH status? For instance, if you are meeting the ADP/ACP portions of SH w/ match, etc. (basic contribution method) would a pension equalizer and/or other nonelective contributions (employer contribution w/ vesting sch) hurt the SH status?

[JanetM]

If you are doing SH match and add a profit sharing type contributions you only need to pass coverage.

[Leopurrd]

Just remember, additional employer contributions above the SH match will not allow you to rely on the top-heavy exemption

[Guest Mrilaomt]

First of all - thanks for the responses.

Would the same hold true if the contributions we added to the plan becuase the employer removed other benefits (e.g., got rid of certain medical benefits so added an extra $200 per person in that class per year - or froze pension benefits and added an extra $300 per person in that class per year)?

[Leopurrd]

Yes; any discretionary contribution would only need to pass coverage testing. If the employer wishes to benefit the employees in the profit sharing plan rather than a medical plan, thats his wishes. You would need to be sure you were allocating the contribution based on your plan document and that any top heavy contributions were made accordingly.