SHNEC and Compensation

[coleboy]

Safe harbor plan with a 3% SHNEC. 3 month eligibility. Definition of compensation is shown as follows:

16.   Pay Before Participation

[ X ] Exclude pay earned before participation in the Plan from definition of Compensation for the following purposes:

a.     [  ] Matching Contributions

b.     [ X ] Non-Elective Contributions

NOTE: If selected, Compensation shall include only that compensation which is actually paid to the Participant during that part of the Plan Year the Participant is eligible to participate in the Plan.  If not selected, Compensation shall include that compensation which is actually paid to the Participant during the period specified in A.13b.

To calculate the SHNEC do I use the whole year's compensation for someone who enters during the year or do I base it on the above election?

 

 

[Mr Bagwell]

Only eligible compensation.

You will need to get the eligible compensation from the employer.  Often times the employer will only give full year compensation and you have to be on your game and look for those that enter part year.