401(k) safe harbor with integrated discretionary contribution

[jkharvey]

The employer has a 401(k) safe harbor plan. The employer makes a discretionary profit sharing contribution allocated using an integrated formula. Question is this: Can the employer take the 3% safe harbor from the integrated discretionary contribution, as long as each participant is getting at least 3% or does the employer make a separate 3% contribution outside of the integrated allocation? My concern is that the total contribution (3% and integrated discretionary) would not have been allocated in accordance with the plan's integrated formula.

[KJohnson]

If I understand what you are asking, the 3% safe harbor must be "outside" the integrated formula. In other words you cannot use the safe harbor contribution as a "base" for permitted disparity.

For most plans, there currently will not be plan language regarding the safe harbor contibution, but these plans must be retroactively amended to include safe harbor contribution allocations before the expiration of the GUST remedial amendment period.