Safe Harbor Nonelective contribution required with 1.401(a)4-11(g) Amendment?

[Dougsbpc]

We administer a Cash Balance Plan and a Safe Harbor 401(k) plan with 6 participants.

For the 2025 year they are failing the 401(a)4 nondiscrimination Test. To pass the test they could ideally bring one of their new employees into the 401(k) plan. Since he was hired toward the end of 2025 he only had about $10k of compensation. The company really likes this employee and would be happy to provide him a 25% profit sharing contribution and make him 100% vested in that contribution. Question: if he becomes an eligible employee via the 11(g) amendment, would it then be required that he also receive a safe harbor non elective contribution of 3%?

Under the plan all eligible non-key employees are entitled to a Safe harbor non elective contribution.

Thanks.

 

 

[Bri]

The -11g amendment would be however you spell it out.  If you want him excluded from the SH source, have the amendment say that.  You wouldn't be making him eligible for the 401(k) portion itself, right?

Of course, now I'm wondering why not just give him the 3% safe harbor and a twenty-TWO percent profit sharing contribution?