Safe Harbor Match

[rcline46]

A 501©(3) client wishes to implement a Safe Harbor Match in their 403(b) program. However, they also wish to exclude an identifiable class of non-highly compensated employees from receiving the match.

Can they do this?

If not, can they set up a second 403(b) plan just for those employees?

Thank you.

[Guest Sieve]

Is there a regulatory or statutory basis for a 403(b) plan using a safe harbor match/non-elective formula?

The 403(b) universal availability rule applies only to elective deferrals. Therefore, employer contributions may be provided only to certain groups of employees, as long as non-discrimination testing passes muster (hence my initial queery). I would assume that separate 403(b) plans must pass non-discrimination standards together, unless each plan can pass 410(b) while tested separately.

But, I invite others with more intimate knowledge of 403(b)s to chime in . . .

[Tom Poje]

I wouldn't think you could do this in one document. the regs would seem to say if you are eligible to defer you must get the safe harbor.

it seems like it would be 'cheating' to exclude that group of employees from that plan and put them in their own deferral only plan, but as long as you don't have to aggregate, that might be possible.