Suspension of 2008 Safe Harbor 3% Requirement

[Guest Ted Kowalchuk, CFP, CFS,]

I have a client who's certain he heard that the 2008 3% safe harbor non elective contribution does not need to be made in an effort to provide relief to employers. All my research indicates that it must be made and there's no relief available. He's wants me to prove my position. Any help would be appreciated. Thanx.

[QDROphile]

Start by charging the client by the hour.

[Guest fender5150]

I remember reading that congress considered providing reliefe for companies that couldn't afford to make safe harbor contributions for 2008, but they ultimately voted against it.

I did a quick search to find something in writing for you. No luck. But even if you found transcripts from the meeting (in November or December), it doesn't prove that they may have met later and enacted relief.

IE: Good luck proving a negative.

My plans (that don't honor safe harbor provisions) will be tested; hopefully before March 15th.

Perhaps a broad question may be helpfull:

Is anybody allowing non-safe harbor plans to fail discrimination testing with no consequences this year? If so, why?

[jkharvey]

Someone responded that plans that don't honor safe harbor provisions will be tested. I'm assuming they mean ADP/ACP test. Isn't the SH contribution required in the document and not simply "optional"? How is that being addressed to the client?

[K2retire]

I believe that there is IRS guidance clearly stating that the correction for failing to meet the safe harbor is NOT to simply require an ADP test.

[Guest Sieve]

K2 -- I'm not sure if there's official guidance on that issue, but here's a link to a post I made shortly after an EPCRS ALI-ABA webinar which contains a description of comments made by Joyce Kahn cocnerning the consequences of failing to make promised SH contributions, and it confirms your statement:

http://benefitslink.com/boards/index.php?s...st&p=167585