safe harbor match used to satisfy top heavy

[Trekker]

I know this has been asked before, but I can't find the links and there is conflicting information out there (no surprise).

We have a 401(k)/PSP, with an integrated PSP contribution and safe harbor match (100% of the first 4% of comp deferred). Last day/1000 hours required for PSP.

A participant is employed on the last day, but no 1000 hours, so he is entitled to the top heavy minimum instead of the full PSP allocation. He is deferring and receives the match.

QUESTION: Does the safe harbor matching contribuiton made on his behalf count toward the satisfaction of the top-heavy minimum contribution he is entitlted to? I know the answer is yes for non-safe harbor matching.

Most of what I find references the EGTRRA provision that matching contributions that are used to satisfy top heavy are still treated as matching contributions. I just need confirmation that safe harbor matching contributions that are used to satisfy top heavy are still treated as safe harbor matching contributions.

Thanks.

P.S. This is one of those times when you know that you know the answer, but you can't put a finger on why.

[Tom Poje]

I believe the logic is as follows:

Match satisfies top heavy.

this particular match happens to be 100% vested, it is only distributable like deferrals (and no hardships), there are no eligibility conditions, and it was x% of pay. what luck, it meets all the conditions of a safe harbor match so I get a free ride on ADP as well.

[Trekker]

Thanks, Tom.

What confused me is that the 2005 Pension Answer Book (Krass), Q26:47, specifically states that safe harbor matching contribuitons may not be taken into account for this purpose (second paragraph of answer).

The pre-EGTRRA Notice 98-52 is cited. Perhaps the book just didn't catch the updated rule.

[Tom Poje]

for those interested, Trekker is correct in regards to the Notice 98-52 - it does specifically say you can't use the safe harbor match for top-heavy, and it references 1.416-1, M-19.

EGTRRA overrode that in 2001.

the regs, in regards to section 1.416-1 even says that they have not been updated for PL-107-16, which was EGTRRA