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Posted

Plan is a safe harbor 401(k) using the safe harbor match to satisfy the safe harbor provisions. Plan includes a prevailing wage contribution that offsets employer contributions.  My understanding is that the prevailing wage contribution negates the top-heavy exemption available to safe harbor plans. However, if in every instance the prevailing wage contribution is used to offset the safe harbor match does that conclusion change.  Do they still get the top-heavy exemption?   

Posted

Why would it negate the exemption, if the dollars are being used to fund solely SH matches?

As soon as they let one penny get used for any other contribution under the plan, then sure I'd agree you lose the exemption.

I suppose then you can debate theoreticals - lose the TH exemption, versus paying the extra PW amounts due in wages rather than benefits....

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