Nonelective Contribution Requirement with respect to HCE

[Ehill]

Question...

If we have a safe harbor 401k plan that is satisfied using the 3% non-elective contribution for NHCE, regardless of participation, how much are the HCE's able to receive for the non-elective contribution? Do they cap out at 3% as well?

Thanks!

[Lou S.]

What does the plan document say?

[Ehill]

The SPD doesn't address the HCE. Just stipulates that in order to maintain "safe harbor" status, your employer will make a contribution equal to 3% of your compensation.

[Lou S.]

The Plan Document will spell out whether or not HCEs are eligible for the 3% non-elective or not. If they are not eligible they get 0%; if they are eligible they get 3%.

If you are asking about additional discretionary employer contributions over and above any required non-elective contributions granted by the plan document and address in the annual safe harbor notice, those additional contributions, if any, would also be governed by the plan document and any potential IRS non-discrimination testing.

[GMK]

Ehill - To be clear (and my apologies if you already know this), the SPD is a summary of the basic provisions of the plan. It is not the plan document, which, as Lou S. said, has the answers to your questions. Participants can review the plan document by scheduling a time to review it with the plan administrator.

[BG5150]

If the plan document doesn't specifically exclude HCEs from either the SH or a PS, then they get it just like anyone else.

An HCEs cap on PS will be determined by 415 and any non-discrimination testing that is applicable.