Safe Harbor 401(k)

[MWeddell]

Yes, it can.

There's plenty of conditions to be met, but the fact that the contribution is made to a separate money purchase plan doesn't prevent it from being a safe harbor contribution. All NHCEs in the 401(k) plan must be eligible to receive that year's money purchase pension plan contribution.

[Guest chant44]

I have a firm that is interestd in starting a safe harbor 401k. The employer is currently making a 10% money purchase contribution. Can this count towards the safe harbor match???

[Guest sacobb]

Does anyone know where I can find a "model" safe harbor notice? I drafted one earlier in the year based on IRS guidance but was wondering if there was one out there that was issued by IRS or other firm.

[Guest Phil L]

The IRS will clearly allow the safe harbor contribution to be given in the MP plan, provided it meets all the requirements (like full & immediate vesting, no hours requirement, and no employment requirement to get the safe harbor contribution). One word of caution, however. The potential problem is that when the IRS eventually approves the prototype plans for the legislative changes, it is possible that this (satisfaction of the safe harbor by contributing to a plan other than the 401(k) plan) might preclude your plans from being able to be rewritten onto your prototype documents. Rumor has it that the IRS does not want that capability in the prototype documents.