Comparable plans

[Guest Louis]

Is a safe harbor 401(k) plan considered a comparable plan with a profit sharing plan.

Client wishes to terminate existing profit sharing plan and distribute funds to participants due to segregated assets and the associated cost of administration. Client also wishes to establish a safe harbor 401(k) plan.

My understanding is that a comparable plan is covered by the same limitations on deductions as the original plan.

[Lorraine Dorsa]

A 401(k) plan is a profit sharing plan, so the same rules will apply if the plan is amended to remove the offending features or is terminated and replaced by a new plan.