Safe Harbor Match question

[Guest mhicks]

Can a company with 2 employees have a safe harbor match of 6% where the only employee deferring is the owner? The plan will be top-heavy - will they need to make a 3% nonelective since NHCE is not getting safe harbor contribution? There are additional profit sharing contributions going into the plan for both employees.

[Archimage]

Shouldn't be a problem.

[Guest Pensions in Paradise]

Are you sure the NHCE is aware they can participate in the 401k? I'd have the NHCE sign the safe harbor notice as evidence that he/she actually received the safe harbor notice. I always wonder about small plans in which only the owners defer. Especially when the plan offers a generous match.

Note that since the employer will be making profit sharing contributions to the plan, the NHCE will have to receive a TH minimum contribution.