safe harbor nonelective plan

[jpod]

401k plan has 3% SH nonelective contribution. No problem with meeting the requirements for the ADP safe harbor.

Plan also has discretionary match. If discretionary match is subject to a "last day" requirement, does that knock you out of the ACP safe harbor? If you say "yes," can you provide a cite to the pertinent section of the regs?

[Kevin C]

Yes, you lose the ACP safe harbor for that match.

1.401(m)-3(d)(4):

(4) Limitation on rate of match. --A plan meets the requirements of this section only if the ratio of matching contributions on behalf of an HCE to that HCE's elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) for that plan year is no greater than the ratio of matching contributions to elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) that would apply with respect to any NHCE for whom the elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) are the same percentage of safe harbor compensation. An employee is taken into account for purposes of this paragraph (d)(4) if the employee is an eligible employee under the cash or deferred arrangement with respect to which the contributions required by paragraph (b) or © of this section are being made for a plan year. A plan will not fail to satisfy this paragraph (d)(4) merely because the plan provides that matching contributions will be made separately with respect to each payroll period (or with respect to all payroll periods ending with or within each month or quarter of a plan year) taken into account under the plan for the plan year, provided that matching contributions with respect to any elective deferrals or employee contributions made during a plan year quarter are contributed to the plan by the last day of the immediately following plan year quarter.