S/H Matching on a Pay Period Basis for an HCE

[Guest MikeD]

Here's the situation:

New 401(k) Plan with deferrals beginning July 1, 2006. Owner makes $30,000 per pay period and deferred $1,250 per pay period. The Plan is a safe harbor plan with a basic matching contribution (100% up to 3% and 50% of deferrals on the next 2%). How do you determine his match?

Do you say that he put in 4.1% of pay each pay period and, therefore, gets a match on that amount for the rest of the year until his match for the year is equal to 4% of $220,000? That would mean that you would match him up to the annual limit on the match. Or do you have to stop his match when his pay for purposes of determining the match exceeds $200,000?

Thanks!

[WDIK]

These previous threads may be of some help.

http://benefitslink.com/boards/index.php?showtopic=33569

http://benefitslink.com/boards/index.php?showtopic=28047

[BG5150]

30 grand a pay period? I'm in the wrong business!