Nonelective Safe Harbor

[Guest djsimonetti]

If employer wants to make the 3% nonelective

safe harbor contribution for NHCEs, can it make the same contribution for HCEs or would the HCEs' contribution (without another 3% for the NHCEs)cause plan to flunk 401(a)(4)? If this is OK, can employer also contribute 3% of participants' excess comp (ie, comp in excess of TWB) if plan is integrated?

[Dawn Hafner]

Giving a 3% contribution to all HCEs and NHCEs would pass 401(a)(4). The Safe Harbor Nonelective contributions are taken into account under 401(a)(4).

The contribution formula can not be integrated with social security through. See IRS Notice 98-52, Section VIII B.

[Guest AKeith]

There is also another option available. It is possible to add a discretionary cross tested contribution to the non-elective 3% which would favor the HCEs and still pass the test. Depending on the company's demographics this could be significant. This is generally known as a 'DASH'(Double Advantage Safe Harbor) Plan, or Super Comp plan. The 'DASH' name is being used by Pioneer Investments, which is actively marketing this type of plan for small businesses.

[Guest dlm]

Could the plan have a 3% across the board QNEC (non-integrated) given to HCE & NHCE. AND also a

discretionary integrated profit sharing contribution?

It seems like this would pass 3% safe-harbor.

[Guest Test]

Dave baker is testing