Excluding CU's from ACP Safe Harbor Match

[austin3515]

Our PT Formatted VS document does NOT allow me to exclude catch-up contribtions from the ACP Safe Harbor Match. What is the basis of that prohibition? I am familiar w/ the preamble to final 401k regulations where they explained why catch-ups could not be excluded from the ADP basic safe harbor match. Is there anything else out there that ties in the ACP Safe Harbor Match as well, perhaps an LRM or something?

From the Preamble:
https://www.irs.gov/irb/2005-05_IRB/ar06.html
The proposed regulations did not include any exception to the requirements for safe harbor matching contributions with respect to catch-up contributions. As part of the proposed regulations the IRS and Treasury solicited comments on the specific circumstances under which elective contributions by an NHCE to a safe harbor plan would be less than the amount required to be matched, e.g., less than 5% of safe harbor compensation, but would be treated by the plan as catch-up contributions, and on the extent to which a safe harbor plan should be required to match catch-up contributions under such circumstances. After reviewing the comments and the applicable statutory provisions (including the amendments to section 414(v)(3)(B) made by the Job Creation and Worker Assistance Act of 2002, (JCWAA) (Public Law 107-147)), the IRS and Treasury have determined that no such exception is appropriate.

[Tom Poje]

I imagine it could be possible for an HCE to receive a match at a greater rate than an NHCE is some circumstances.

[austin3515]

Match calculated/funded each apy-period, no annual true-up. NHCE contributions $18,000 in first 9 months. Based on the true-definition of catch-ups, everything in Q4 is catch-ups and no match is accrued. Under 50 HCE 401k contributions are all matched, thus violating the rule that HCE's cannot have a better rate of match at any level of deferrals (1.401(m)-3(d)(1)-(4)(d)(4)).

Agreed?

I actually think that if there was annual true-up for the match, there could essentially never be a (d)(4) issue. It seems related to the calculations made more frequently where it crops up because catch-ups are obviously going to materialize later in the year.