limit compensation for HCE's in a safe harbor match plan

Is this possible?  Another work around we thought of is to exclude HCE's from the safe harbor match and benefit them with a discretionary match.  It seems like just limiting compensation would be easier.

1. Why do you want to do this?

2. Are you thinking you can do a discretionary match only for the HCEs?

I'm thinking they want to provide a lower benefit / match to the HCE's, who are primarily the CEO and CFO.

I think you are OK to put a limit on plan compensation for HCEs that is below the 401(a)(17) limit, but not until the next year. You could not do a discretionary match just for the HCEs.

How about a dollar cap on the safe harbor match just for HCEs?

1.401(m)-2(d)(4) appears to be the linchpin on this.  IT's the one that say the ratio of an HCE's match to their deferrals cannot be greater than that of any NHCE.  Not sure what you all think but I don;t see anything that explicitly says that requirement cannot be performed on a consolidated basis between both matches.  One requirement is that you have to satisfy one of the SH contributions--this plan does.  A fixed match cannot be based on deferrals in excess of 6% of pay.  This plan presumably will not do that.  The last relevant requirement is that the match rate for HCE's can't be greater than NHCE's.  When combined, the NHCE's will be greater (because the HCE's will be excluded from the SH Match).  The reg does not say "excluding the Safe Harbor Match."  I would never do this without submitting an ask the Author question of ERISApedia, but I am definitely curious if you all see something in the reg that would cause a problem.

(4) Limitation on rate of match. A plan meets the requirements of this section only if the ratio of matching contributions on behalf of an HCE to that HCE's elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) for that plan year is no greater than the ratio of matching contributions to elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) that would apply with respect to any NHCE for whom the elective deferrals or employee contributions (or the sum of elective deferrals and employee contributions) are the same percentage of safe harbor compensation.

Was thinking about that but didn't dig into - you may have something there.