Safe Harbor Match with additional Match

[Alex Daisy]

Safe Harbor Match Plan (100% on the first 3%, 50% on the next 2%) gives an additional Discretionary Mach of 50% of deferrals up to 12% of Compensation.

I am pretty sure means that the ACP test must be run.

Can you tell me what Matching contributions are included in the ACP test? Do I include the Safe Harbor Match plus the Discretionary Match, or only just the Discretionary Match?

Does the answer change if the Discretionary Match has a Last Day rule?

Any guidance is greatly appreciated.

Alex

[Tom Poje]

1.401(m)-2(a)(5)(iv)

...you are permitted to exclude match to all eligible employees that do not exceed 4% of comp.

so it is optional to include the 4%

answer does not change on anything else

[Alex Daisy]

Tom: The Discretionary Match formula is 50% of deferrals up to 12% of compensation, which comes to 6%.

Because this is more than 4%, doesn't this require me to do run the ACP test on the entire Discretionary Match?

[Tom Poje]

yes, agree on the discretionary match, but my understanding it is optional to include the initial safe harbor match if you want to.

ERISA Outline book 11 section XIV part E 8a.2 would seem to agree - you can disregard amounts only if those matching contributions satisfy the basic or enhanced formula.

and 8a2)b adds Why? - only excess amounts in excess of 4% might be refunded.

The only example provided is an enhanced match that would fail ACP, but I don't see why the same rules wouldn't apply for combining with a discretionary match.