additonal safe harbor employer contribution

[LIBERTYKID]

A 401(k) plan provides for a safe harbor employer contribution of 3 percent. It wants to make an additonal employer contribution for only certain employees (lets assume a nondiscrminatory group). Is this permissible?

[Guest Sieve]

Yes. If the document so provides.

[Guest EricWings]

Yes, you can also apply a vesting schedule to the additional employer contribution. The plan will now be subject to the Top Heavy test because it will not meet the exemption under 416(g)(4)(H). Remember if the plan is top heavy you use 415 compensation when calculating the top heavy contribution which may be different from the plan's defined compensation.