Imputing permitted disparity in a safe harbor 401(k) plan.

[Guest]

In computing EBAR's for a safe-harbor 401(k) plan with a tiered PS allocation is this the correct methodology?

A. Before imputing disparity:

1. Calculate EBARs for avg. ben. % test using contributions from all sources-deferrals,3% safe harbor,employer allocations.

2. Calc EBARs for 401(a)(4) general test including safe harbor but excluding deferrals.

B. To impute disparity,repeat these steps, but using employer allocations only.

[Guest Mr. X]

I would say simply that the only difference with a safe harbor plan is that you cannot impute permitted disparity on the 3% nonelective contribution piece. I believe that is what you are saying as well.

[Guest]

agree, you are not allowed to impute on the 3% nonelective to a safe harbor.(but you do include them in the 401(a)(4)test. If there were forfeitures from vested contributions, don't forget to include them, and you can impute on them.