Safe Harbor Matching Contributions and ADP/ACP Testing

[Guest jvajj]

We have a plan that wants to discontinue the SHMAC the remainder of the year. They have put their notice and will make the SHMAC through the correct date. When we have to do ADP/ACP Testing for the year do the SHMAC count towards the ADP or ACP Test? They utilized the basic SHMAC formula.

Thanks for the help.

[Tom Poje]

the Preamble to the final 401(k) regs states that "a plan satisfies the section 401(k) safe harbor if it makes specified QMACs for all eligible NHCEs."(If plan was otherwise, the preamble also states "in lieu of QMACs the plan is permitted to provide QNECs equal to 3%..."

thus, a safe harbor plan has either QMACs or QNECs that were made.

without other specific guidance in regards to safe harbor plans (there are none that I am aware of) I think you would treat the contributions as such...thus it would appear you could use them either in the ADP test ot the ACP test, since that is how you would have used a 'regular' QMAC or QNEC.

but of course thats my opinion or thought.