Safe Harbor contribution on wages after termination?

[Guest mookie23]

I have a participant who terminated in august of 2005 but received W-2 wages in 2006 (comissions from a collected contract). The participant did not work a single hour in 2006. Do I need to give her a Safe Harbor contribution (3%) for the 2006 plan year? TIA

[k man]

in my view you have to see how your plan defines separation from service and whether post-severance compensation is excluded. if they have had a separation from service in 2005 they wont be entitled to a contribution in 2006.