3% Safe Harbor Non-Elective + Fixed Match

[Guest 4:15 Limit]

We took over the administration of a 401(k) profit sharing plan with a 3% non-elective contribution for all eligibles. They also have a fixed match (50% up to 4% of pay) that has a last day & 1,000 hour requirement. Does the match have to be ACP tested because of the accrual requirements or is there some exception for a plan with a fixed match? I've seen different answers so now I'm confused. I was under the impression that you had to ACP test it because it imposes accrual requirements.

Any input would be greatly appreciated.

Thanks!

[J Simmons]

Off the top, I think you have to ACP test the match because depending on the elective deferrals (no need to ADP since safe harbored by the 3%-of-pay contribution), the match could be skewed in favor of the HCEs--and then there is, as you say, the benefit accrual requirements that could do or add to the same skewing.

[rcline46]

Check the final 401(k) amendment - I think that if you have a match in a SH plan, there cannot be any restrictions on receiving the match. (no eoy 1000 hr requirement)

[Guest 4:15 Limit]

Thanks very much for your input.

We are amending the plan effective 1/1/2010 to eliminate the accrual requirements and change it to a discretionary match.