cheersmate Posted March 13, 2019 Posted March 13, 2019 Safe Harbor 401k Profit Sharing Plan provides: 401k+Catch-up for all 3%SHNEC for all NHCEs only Discretionary PS, each Participant own rate group 25 HCEs, 2 are owners 100+ NHCEs Employer would like to contribute the following: 2 owners 9% PS Remaining HCEs 1% PS (Plan is NOT TH) NHCES only the 3% SHNEC, 0% PS -- this satisfies the G/W minimum Can this be done or must the NHCEs receive "some amount of" PS?
Mike Preston Posted March 13, 2019 Posted March 13, 2019 There is no reason other than a failed 401a4 test that would preclude this. cheersmate 1
cheersmate Posted March 13, 2019 Author Posted March 13, 2019 5 minutes ago, Mike Preston said: There is no reason other than a failed 401a4 test that would preclude this. Mike - thank you for your reply It passes general testing. My concern was whether it was necessary that the NHCEs receive a PS (specifically) allocation rate... was not clear to me the 3%SHNEC covers it.
cheersmate Posted January 8, 2020 Author Posted January 8, 2020 On 3/13/2019 at 4:58 PM, Mike Preston said: There is no reason other than a failed 401a4 test that would preclude this. Mike - If you can refresh by reading the above.. Assuming it passes a4... could the 2 owners receive 6% PS and in addition to the NHCEs receiving zero PS could the remaining non-owner HCEs receive zero PS (i.e. they receive only the 3%SH)?
Mike Preston Posted January 9, 2020 Posted January 9, 2020 If it is everybody in their own group, sure. cheersmate 1
ERISADC Posted December 9, 2020 Posted December 9, 2020 OK, you are asking, essentially, whether your plan may use the 3% safe harbor nonelective contributions to satisfy, or help satisfy, the general test - including the minimum gateway requirement. I think this is OK, that Regs. sec. 1.401(a)(4)-8(b)(3)(vii) says you may do this. This reg incorporates Regs. sec. 1.401(a)(4)-2(c)(2)(ii), which says that "[A]llocations taken into account" for the general test "include all employer contributions ... that are allocated to the account ... of an employee under the plan for the plan year ... ."
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now