Guest Tom Freeman Posted June 1, 1999 Posted June 1, 1999 I just need a quick confirmation on a proposed safe harbor formula. The employer wants to match 400% of 1% of pay. Is this safe harbor? I know that the aggregate match equals 100% of 4% but it does not seem right. All responses are greatly appreciated.
MWeddell Posted June 1, 1999 Posted June 1, 1999 The proposed formula is a safe harbor formula, assuming immediate vesting and other conditions are met. IRS Notice 98-52, Section V.B.1.a.ii. For each rate of elective contributions, the aggregate amount of match is at least as generous as the basic safe harbor matching formula. Furthermore, the rate of match doesn't increase at any point when the elective contributions increase.
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