Safe Harbor Contribution Required?

Suppose you have a Safe Harbor 401(k) Plan sponsored by a partnership with 12 partners and 6 employees. The plan has a December 31 year end.

The plan provides a 3% Safe Harbor Non elective contribution to only non-key employees.

Suppose a non-key employee becomes a 5.5% partner in December (i.e. they are only key for one month of the plan year). Would they be required to receive a 3% Safe Harbor contribution for that plan year?

Thanks!

The plan document's definitions section should have an entry for "Key Employee" which should give the answer precisely. Our says it's based on ownership at any point during the year, so hopefully yours is similarly decisive!

I don't think I have ever seen a SHNEC allocation condition that excludes key employees.  I have seen SHNEC allocation condition that excludes HCEs.  "Key employee" is a term of art used to determine if a plan is top heavy and there are several criteria based on ownership percentage, officer status and compensation, plus in some cases the total number of key employees may be limited to a subset of employees who meet the criteria.  Top heavy provisions and related definitions often appear in a separate section of the plan document, and it the case of pre-approved plans, in a separate section of the basic plan document.

If this plan is using the top heavy definition of key employee as an allocation condition, then the plan will have to specify the year of the determination of the key employees.  Top heavy testing is done as of the last day of the prior plan year, so key employees for that test are determined based on ownership in the prior year.