Safe Harbor Plan with only the owners deferring

[Guest EPS2]

Here's an interesting one:

We have a safe harbor plan that uses the basic safe harbor match.

The only participants that defer are the husband and wife owners. There are seven other participants that are eligible to defer, but have chosen not to.

We got a call after running the match allocation letting us know that they cannot afford to put in the total match amount, and that they would only be able to contribute a portion of it.

I was wondering if anyone knew of a way to get around having to allocate the total basic match since they are the owners, and no other rank and file participants deferred for the plan year. Would it be possible for them to "waive" out of the contribution, and still maintain the SH so that the ADP test would not have to be run?

I don't think there is a way, since the document is a Sungard Corbel Standardized Prototype document, and no where does it have any guidance regarding this situation (at least none that I see).

Does anyone have any ideas or know of where the code talks about this situation?

[Kimberly S]

The part where it talks about operating the plan in accordance with its written document comes to mind, but doesn't give the answer that you want.