Safe harbor and Top Heavy

[Craig Garner]

I understand that a plan consisting solely of deferrals and safe harbor contributions will get a free pass on Top Heavy testing. If this true even if:

1) safe harbor contributions are NOT made to HCE's, and

2) some of the HCE's are non-key (meaning there are non-key EE's who can never get an employer contribution in the plan)

[Jim Chad]

FWIW I think you are right. Anyone else?

[Bird]

I agree.

[Gadgetfreak]

I asked TAG this exact question recently and they agreed too.

[Lou S.]

Absoluetly. A plan that consists soley of deferrals and ER safe harbor contributins is deemed to be NOT top-heavy for that year regardless of the T-H ratio.

[John Feldt ERPA CPC QPA]

Yes, when all of the top heavy exemptions are met, it is still possible that some non-key EEs are not getting a top heavy minimum (the HCEs who are not key employees). And the plan still meets the TH exemption when that occurs.

[K2retire]

Yes, when all of the top heavy exemptions are met, it is still possible that some non-key EEs are not getting a top heavy minimum (the HCEs who are not key employees). And the plan still meets the TH exemption when that occurs.

If the safe harbor contribution is a match, there are usually several non-key employees who don't get a match. This would be a similar situation.