Safe Harbor Match Arrangement

[MBCarey]

Can a plan match dollar for dollar on first 4% and 50 cents on the next two percent for a total of 5% match and still be within the guidelines of Safe Harbor and not be subject to either the ADP or ACP test. The extra match on the 2% would not be discretionary.

[Tom Poje]

ah, an ehnhanced match. its better than the basic match.

so it satisfies ADP safe harbor.

It is limited to 6% deferred, so it satisfies ACP sahe harbor.

go to the head of the class.

[BG5150]

I'm guessing, too, that the match will be 100% vested.

[John Feldt ERPA CPC QPA]

Yes, all SH contributions are 100% vested (under the pre 2008 SH plans).

In 2008, the new QACA SH plans will allow 2-year cliff vesting on the SH contributions to these new automatic enrollment SH plans. Of course, you can still use the current SH plans if you want, which many will.