Allocation Conditions in SH 401(k) Plan

[MarZDoates]

I have a client that uses a 3% safe harbor non-elective contribution plus a discretionary profit sharing contribution. Last day of employment allocation condition applies to the discretionary p/s. P/S is pro rata based on comp. (Not cross tested/new comp allocation).

Is it correct that I must pass the general test since a terminated participant receiving the 3% safe harbor but not part of the profit sharing eliminates the "uniform allocation" forumla of the plan?

I think I heard this in class or in a webinar, but can't find my notes.

Thanks!

[Lou S.]

_{Don't see why you can't pass the 70% test if you treat those who only recieve the SHNE as not benefiting.}

[Tom Poje]

see example 2 under 1.401(a)(4)-2(b)(vi)(F)

similar scenario, example uses top-heavy rather than safe harbor, but concept is the same.

[Kevin C]

Here is a fairly long previous discussion of the topic.

http://benefitslink.com/boards/index.php?/topic/46028-401k-snhec-and-integrated-ps-allocation/

[MarZDoates]

Thanks, everyone!