Michele F Posted May 20 Posted May 20 The 401K plan was adopted for the plan year starting in 2024. It did not pass the ADP testing. If they adopt the 4% safe harbor contribution now, do they still need to make a top-heavy contribution to the plan? Only 2 of 3 owners made salary deferrals, and 1 of 4 rank-in-file employees made a salary deferral. I cannot find a definitive answer, and was hoping to see what others are doing in this situation. FYI... I did not set this plan up, and it is a possible takeover plan.
Popular Post Lou S. Posted May 20 Popular Post Posted May 20 If you elect the 4% SF nonelective up to the last day of the following plan year, you are a SF for the year. So if that is the only employer contribution you are deemed not top-heavy. Though you would need to make it to all eligible (though I believe you can exclude HCEs still), not just the deferring because you can't add a retroactive SF match. truphao, CuseFan, Carike and 3 others 6
Michele F Posted May 21 Author Posted May 21 That was my understanding as well. Thank you for clarifying.
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