Adding safe harbor mid-year; 3% Nonelective based on full year comp?

[Brenda Wren]

Profit Sharing plan is established 1/1/05 and 401(k) deferrals commence 3/1/05. Does the 3% nonelective fully vested contribution have to be based on 12 months compensation or can it be limited to the 10 months the salary deferral features of the plan were in effect?

[austin3515]

You can limit it to 10 months. If you're using a VS or IDP, the Plan can be written this way; with a prototype, be careful because the Doc might have already made this decision for you, or worse - it might be ambiguous!