ACP Test in Safe Harbor Plan

[BG5150]

I have a plan that wants to do a fixed match in excess of 6% of pay (dollar for dollar up to 10%) --generous, I know.

There's a 3% SH Nonelective.

Oddly enough, I've never had to perform an ACP test on match in a SH plan.

I know I can test ALL the match together.  But if I just want to test the non-safe harbor piece, what percentages am I using?

I'm guessing if someone has a 10% match, do I give them a 4% in the ACP test?  Someone deferring only 6% gets a 0?

[CuseFan]

So a 3% SH plus a 10% match? I would be asking/checking if they really need to be a SH plan with a match like that and with up to 13% available/possible for employer contributions, are they as efficiently designed as they can be - subject to employer objectives of course.

I thought you had to ACP the entire match, but I don't do that testing so I'm not sure.

[JustnERPA]

See 1.401(m)-2(a)(5)(iv). You may test only match exceeding 4% of pay (3.5% if QACA):

(iv) Matching contributions taken into account under safe harbor provisions. A plan that satisfies the ACP safe harbor requirements of section 401(m)(11) or 401(m)(12) for a plan year but nonetheless must satisfy the requirements of this section because it provides for employee contributions for such plan year is permitted to apply this section disregarding all matching contributions with respect to all eligible employees. In addition, a plan that satisfies the ADP safe harbor requirements of § 1.401(k)-3 for a plan year using qualified matching contributions but does not satisfy the ACP safe harbor requirements of section 401(m)(11) or 401(m)(12) for such plan year is permitted to apply this section by excluding matching contributions with respect to all eligible employees that do not exceed 4 percent (3 1/2 percent in the case of a plan that satisfies the ADP safe harbor under section 401(k)(13)) of each employee's compensation. If a plan disregards matching contributions pursuant to this paragraph (a)(5)(iv), the disregard must apply with respect to all eligible employees.

[AKconsult]

Agree with JustnERPA.  The ACP may be performed on all of the matching contributions, or just on the match that exceeds 4% of compensation.  However, you may find that the test results are better if you use all the  match in the test, not just the match over 4%.