I know you can offer an enhanced Safe Harbor Match...

[Lori H]

Small 401 offers a 5% non-elective 100% vested to all eligible participants. Can it still satisfy Safe Harbor requirements?

[ETA Consulting LLC]

Sure. You can offer a SHNEC of 25% of salary; 3% is only a minimum.

Good Luck!

[Tom Poje]

just to clarify: provided it also satisfies the other requirements for a safe harbor...e.g. notice is provided, distribution restictions apply, etc.

but merely providing a 5% nonelective 100% vested contribution does not satisfy safe harbor.

the regs simply say "at least 3%..." and I've actually seen a document say that, giving the plan the option of providing more

[K2retire]

just to clarify: provided it also satisfies the other requirements for a safe harbor...e.g. notice is provided, distribution restictions apply, etc.

but merely providing a 5% nonelective 100% vested contribution does not satisfy safe harbor.

the regs simply say "at least 3%..." and I've actually seen a document say that, giving the plan the option of providing more

If the additional amount is optional, how do you satisfy the notice requirement?

[Guest DuChamp]

just to clarify: provided it also satisfies the other requirements for a safe harbor...e.g. notice is provided, distribution restictions apply, etc.

but merely providing a 5% nonelective 100% vested contribution does not satisfy safe harbor.

the regs simply say "at least 3%..." and I've actually seen a document say that, giving the plan the option of providing more

If the additional amount is optional, how do you satisfy the notice requirement?

Why not just have an additional pro-rata discretionary profit sharing allocation?

[Tom Poje]

a few years ago, back when I was on the Q and A committee I posed the question and the one IRS agent looked at me funny, as if to say "it is in the regs. its 3 %." he grabbed the book off the wall and looked and did a double take (I think it's buried in most people's minds its 3% and only 3%)

dang it, make me look it up

2007 ASPPA Conference

Q17) Safe Harbor 401(k): For the safe harbor nonelective contribution, does the document or notice have to specify the exact percentage or can it simply say “at least 3%,” giving the employer to contribute a larger contribution if it so desires?

A: The safe harbor matching contribution formula must reflect the exact percentage. The nonelective contribution formula may be expressed as “at least 3%.”