Your thoughts on elig

[doombuggy]

I am working on a takeover plan that our firm did a new EGTRRa document for last year (not sure why, I did not handle this myself).

It appears that the plan has a different service requirement for entry into the plan for Profit Sharing than it does for deferrals (regular and Roth) and match.

For deferrals, Roth & Match (which they apparently no longer do the discretionary match but did at some point in the past) you need to be 21 and have 3 months of service. you will get in on the 1st of the month following the eligibility requirement fullfillment. For proift sharing however, you need to be there for a year; entry dates are 1/1 and 7/1. They use the elapsed time for hours.

Plan has a safe harbor non-elective. As I read the Datair document that was done last year, if you are elig for deferrals, you are elig for safe harbor. I am being told that the old EGTRRA document had the safe harbor elig lumped in with the profit sharing ("It's an employer contribution").

I haven't had a plan with mis-matched entry requirements in a LONG time; the last plan I had like this did NOT have safe harbor.

What are your thoughts? Can you have a longer wait period for the safe harbor like that?

The plan has three people who are not eligible for the profit sharing portion and it is top heavy. What the question boils down to is should that 3% they are getting be top heavy (vesting schedule) or safe harbor (no vesting schedule). The dollar amounts are the same. I think it should be safe harbor, but I am getting the T/H agrument from someone else.

[rcline46]

I think if the redone doc was effective in 2011 as you indicate, you use that document if you are testing for 2011. It does not matter what the previous doc said.

However, you company at least, and that would imply you, should have access to ALL prior docs and amendments at least back to the GUST restatement.

It is legal to delay the SH NonElective or Match for the 1 year, but then that brings TH and testing back in for those not subject to the SH contributions.