Enhanced safe harbor and testing requirements

Is a enhanced safe harbor match (6%) still exempt from top heavy and ADP and ACP testing?

Yes, as long as the SHM is the only employer contribution made to the plan, and the match rate does not increase with the increases in the rate of deferrals.

Here are a couple of "gotchas":

• A plan that allows deferrals to be made before participants become eligible for the SH contribution/match is subject to the TH rules.
• A plan that allocates a discretionary nonelective employer contribution is subject to the TH rules in a year for which the contribution is made.
• A plan that reallocates forfeitures to participants on the same allocation basis used for contributions is subject to the TH rules in a year for which the reallocation is made.

I have not seen a definitive answer to the question whether QNECs made to correct a missed deferral opportunity, a failure to implement deferral elections, or other operational issues would cause the plan to lose the TH exemption.