ACP Safe Harbor hardship withdrawal

[PMC]

Plan satisfies ADP/ACP safe harbor contribution requirement by using the basic matching method. The plan also permits a discretionary match and if made will be restricted so that the ACP safe harbor will apply.

Can the discretionary Match that satisfies ACP be withdrawn due to hardship?

I see where employer contributions used to satisfy ADP can't be withdrawn due to hardship and QNECs and QMACs, but not the ACP safe harbor contributions. Would they be considered QMACs and therefore prohibited from w/d due to hardship?

[Kimberly S]

What does the document say?

[austin3515]

The regular match is NOT a QMAC. Its just a regular match that is made which does not blow your safe harbor. So assuming your document allows hardships from your regular matching contributions, hardships are okay.

[Tom Poje]

you raise an interesting question - most of the time you read that QNECs and QMACs that are used in nondiscrimination testing are not available for hardships. and you are talking about a contribution that is being used to satisfy the ACP safe harbor.

if you dig into your all that material you printed and saved regarding safe harbor 401(k)s I am sure you will find your copy of Notice 98-52. under Section IV (Definitions) you will see ...excuse me while I blow the dust away, I can't read the it...oh, its item H Safe Harbor Matching Contributions...(1) are nonforfeitable within the meaning of section 1.401(k)...

well, the discretionary match could be subject to forfeitability, so I'd say that unless your document states otherwise, there isn't a restriction on the discretionary match. see also 1.401(k)-6 definition of QMAC which also require 100% vesting.

or, put another way, I'd hold that the unavailability of hardship applies only to those safe harbors that are 100% vested.

or a discretionary match, while it satisfies the ACP safe harbor is not a QMAC.