rlb64 Posted July 18, 2006 Posted July 18, 2006 Client contributes 7.5% profit sharing to NHCE's and around 12% for certain HCE's. They wish to add a safe harbor match to remove adp testing, but they still want everyone to have at least 7.5% total employer contributions. They through out the idea of the profit sharing offset by safe harbor matching contributions. Any suggestions?
BG5150 Posted July 18, 2006 Posted July 18, 2006 Why not just do a 3% Safe Harbor Nonelective Contribution? Then a 4.5% Profit Sharing contribution. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
austin3515 Posted July 18, 2006 Posted July 18, 2006 Can't be done. The match plan and the PS plan are two totally independent "plans". This should not be confused with the top heavy rule, which allows THM's to be offset by the match. Austin Powers, CPA, QPA, ERPA
BG5150 Posted July 18, 2006 Posted July 18, 2006 You'd run into a problem wherein some people would have the match and others wouldn't. You can't decrease someone's P/S contribution by the amount of match they earned. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
david rigby Posted July 18, 2006 Posted July 18, 2006 This sounds like an opportunity for some good employee communication. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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