New comparabilty Top Heavy safe harbor 401(k)...

7 participant 401(k) with standard safe harbor match.  Plan is Top Heavy and has a New Comparability profit sharing formula.  Is a 3% minimum allocation to Non Key ee's if a Profit Sharing is allocated?  Does the safe harbor match not satisfy Top Heavy? 

most likely matching contributions can be used for top heavy purposes, but I suppose you could have a document that says otherwise..

ft William has the following language

(in one spot it says deferrals and match won't be used except as provided by (b) which says

(b) Matching Contributions. Employer Matching Contributions may be taken into account for purposes of satisfying the minimum contribution requirements of Code section 416(c)(2) and the Plan. The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution requirement shall be met in another plan, such other plan. Employer Matching Contributions that are used to satisfy the minimum contribution requirements shall be treated as Matching Contributions for purposes of the ACP test and other requirements of Code section 401(m).

however, matching contributions only count toward the average benefit percentage test. they won't help toward the rate group test. and only nonelectives count toward the gateway, so matching contributions won't help satisfy the gateway minimum either. so if you have new comparability and the HCE gets 15% you have to give 5% ps to the NHCEs anyway, even  if they receive a match.

hmmmm. the Grinch is too cheap to want to do that....

The plan is deemed not top heavy only if the safe harbor matching contribution is the only employer contribution. The minute you add in a dollar of discretionary profit sharing, the top heavy minimum is required.

As Tom said, the safe harbor match does count towards the 3% top heavy minimum.