Aggregate for Testing Purposes?

[Dougsbpc]

Suppose an employer sponsors a safe harbor 401(k) plan with a safe harbor match. Also, suppose the sponsor a cross-tested profit sharing plan.

The profit sharing plan must be tested for 401(a)4. Must all components of the safe harbor 401(k) be aggregated for testing purposes? Or does the safe harbor 401(k) stand on its own?

Thanks.

[Tom Poje]

All plans are aggregated for purposes of the avg ben pct test. there is no pick and choose. It does not matter whether you permissively aggregate plans or not. it does not matter if some contributions are deferral or match or safe harbor, everything gets lumped together for this test (except catch-up contributions and the highly unlikely after tax contributions. there is only one avg ben pct test per employer(except for otherwise excludables, which could be run separately). hence, if the avg ben pct test pass, then that portion of testing will pass no matter what combination of permissively aggregating plans you do.

of course, you would never use deferrals or safe harbor match in the rate group test.