Safe Harbor Match and Gateway

[Dougsbpc]

Suppose you have a safe harbor 401(k) plan with a safe harbor match. This year the employer wants to also make a profit sharing contribution. Each participant is considered their own group. Also the plan has no hours or last day requirement for a profit sharing allocation.

An employee terminates 9 months into the year. Can he receive a $0 profit sharing allocation or must he get the gateway because he was entitled to the safe harbor match?

Thanks.

[PensionPro]

he can receive zero ps

[Tom Poje]

well, if you only had 3 NHCEs and 1 doesn't receive the nonelective, then coverage would be at 2/3 or 67% and fail...so I suppose under certain circumstance you might have to provide a contribution.

[pmacduff]

just another thought...the gateway can kick in if a participant is receiving a "non-elective" contribution & any matching contribution even safe harbor match is not a non-elective.