5500 question 8(a): are Safe Harbor matching contributions and SIMPLE

[wmyer]

If I have a Safe Harbor plan with the Safe Harbor matching option for salary deferral contributions, should I use characteristic code '2K' for this? '2K' would be used if the Safe Harbor match is considered a 401(m) arrangement; however, since the Safe Harbor match is not subject to 401(m) discrimination testing, is it really considered part of a 401(m) arrangement? The instructions DO specify that QMACs should not use the '2K' characteristic code, and the Safe Harbor match seems to me to have more in common with QMACs than with regular matching contributions subject to ACP testing. How are other people reporting the Safe Harbor matching and, for that matter, with the SIMPLE 401(k) matching contribution on line 8(a) of the 5500 Form?

[Guest Rudy]

Whether or not the participant receives the match, and the amount of the match, are both dependent upon the employee's rate of deferral. The only differences between this contribution and a normal match is that the safe harbor match is immediately vested, and the amount of deferral that can be matched is limited.

Since the employer safe harbor match is based on employee deferrals (as stated in the instructions for code 2k on page 13), we report the code 2k with our safe harbor match plans.