Compensation from Date of Entry

[thepensionmaven]

Dual entry, SHNE with profit sharing. for initial year of participation, compensation based on w-2 from date of entry. In reading the EOB, compensation must be based on full years' W-2?

 

[Pam S.]

If your Plan is Top Heavy and the sponsor is making a discretionary contribution in addition to the Safe Harbor Non Elective, then any mid-year entrant needs to receive a total allocation (SHNE + PS) sufficient to satisfy the 3% Top Heavy - on full year W-2 (SHNE can be allocated using partial year comp, difference to get the participant(s) to the TH 3% minimum on full year comp can be PS).  The goal is to be sure that all new participants receive 3% of their full year's compensation in total.

 

[justanotheradmin]

Is the employer contributing both a safe harbor contribution AND an additional discretionary employer contribution?
Will the plan be top heavy? 
if yes to both then I agree with Pam S. 

If the plan IS top heavy, and the ONLY employer contribution is the Safe Harbor, then I would suggest reading your plan document (including the underlying document if necessary). Many pre-approved documents these days mirror the allowance in the IRS rules that say Top Heavy minimum is met with the Safe Harbor contribution alone (yes, even with only partial year comp) if no other employer contribution is made. 

If the plan is not top heavy, well then, I'm not sure what you are reading in the EOB. Maybe the question isn't about Top Heavy at all? Something else? 

[thepensionmaven]

Justsnotheradin   - employee plus safe harbor only.  I thought I heard a presentation a few years ago (ASPPA?) the definition of comp for initial year  participation as stated in Contribution section of a VS plan applies for SH as well.