Safe Harbor Plan with Cross Testing

[Guest Ephesian431]

I have a question on how cross testing is affected by the safe harbor provision. What is the value of cross testing in the following example:

NHCE payroll 3,000,000

HCE payroll 3,000,000

Benefit formula: 401k $.50 up to 6%

MPPP 3% safe harbor

3% additional

Permitted disparity

IF the example is not helpful, some +'s and -'s please. Thanks in advance.

[Guest]

not 100% sure what you are asking, but here goes anyway...

safe harbor non-elective contributions may be used to satisfy 401(a)(4) nondiscrimination requirements.

however, since a safe harbor non-elective contribution can not be 'integrated', you can not impute permitted disparity on that portion. (just like any other non elective that you can not impute permitted disparity (e.g. Esops, etc.)

the nonelectives can be used for top heavy as well, but not the match safe harbor.

......(Sirach 21.14).....