Safe Harbor Non Elective Contribution

[Alex Daisy]

Can you give more than than a 3% Safe Harbor Non Elective Contribution and still be considered a Safe Harbor Plan?

What is the Non Elective % Maximum?

Thank you, ALEX

[JanetM]

I looked and I can find no max given for SHNEC. There is a limit for matching in 401(m)(11)(B)(i) - 6% max match to see get free pass on testing. While I don't see any max for SHNEC I would look at the circumstances and facts. If you are benefiting more NHCE than HCE why not go higher to 6% (but now more). If this is mostly HCE call ERISA atty for advice.

[Alex Daisy]

I looked and I can find no max given for SHNEC. There is a limit for matching in 401(m)(11)(B)(i) - 6% max match to see get free pass on testing. While I don't see any max for SHNEC I would look at the circumstances and facts. If you are benefiting more NHCE than HCE why not go higher to 6% (but now more). If this is mostly HCE call ERISA atty for advice.

The Plan has 3 HCE's and 2 HNCE's, and they would all be benefiting from the increased Safe Harbor Non Elective Contribution.

I could find nothing in the regulations to show that this was allowed or disallowed.

Any help would be greatly appreciated.

[Belgarath]

401(k)(12)©. The contribution must be "at least" 3%. So yes, it can be higher.

[Tom Poje]

I asked this same question to the IRS personal that show up at the ASPPA conference. After a sort of an initial puzzled look, they verified the language does in deed say 'at least 3%' and they indicated as long as you have the proper document language you could indeed give more than 3%. In other words, if your document says you are going to provide 3%, then ypu have to follow the terms of the document and only give 3%, not more.

I still haven't figured an exact situation in which providing more helps or improves testing, but there doesn't appear to be anything to stop a compnay from being more generous than it needs to be.