Safe Harbor NEC to HCE

[Guest Peggy806]

I was thinking that the 3% safe harbor NEC had to go to everyone, but wanted to make sure. Can I exclude an HCE from getting the 3% NEC for any reason? I was thinking that we couldn't put an hours requirement or any other requirement on the NEC.

thanks

[Guest Sieve]

SH contributions only have to go to eligible NHCEs--you can establish a SH Plan with that limitation. But, you can't make a change to exclude HCEs from a SH contribution except at the beginning of the year.

[John Feldt ERPA CPC QPA]

Thus, you'll need to do what your document says for this year (the document either excludes them from the SH, includes them, or only includes/excludes specific HCEs). You can amend the next year (if necessary) effective on the first of next plan year - that amendment must be executed before that plan year starts and the SH notice should reflact those changes.