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Law firm wants to Modify W-2 definition of Compensation in a SafeHarbor Match Plan


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Posted

Partners[who all get K-1's] want to amend Safe Harbor k-plan definition of w-2 to exclude bonuses. I was under the impression that a Safe Harbor plan had to use 415 comp definition.

Posted

No. A SH plan can use any definition that satisfies 414(s), as far as I can recall.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

Posted

A number of things have the label "safe harbor" but are unrelated. W-2 wages are a "safe harbor" definition of compensation, but are not the mandatory form of comp for plans using the ADP/ACP testing "safe harbor" (and both are unrelated to the hardship "safe harbor", etc).

The following may be of use:

http://www.irs.gov/pub/irs-tege/epchd304.pdf

http://www.ftwilliam.com/Docs/Compensation_6-20-12.pdf

Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

Posted

Fascinating. A law firm plan sponsor, and the advice just might be "get a legal opinion".

:D

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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