Pammie57 Posted October 10, 2019 Posted October 10, 2019 A retirement plan was operating as a safe harbor plan - until they amended their plan as October 21, 2018 to no longer make the safe harbor match. Do they have to be tested for non-discrimination-- as in the ADP/ACP test for 2018? I think so, but just want confirmation. Also, when the top-heavy test is run, it shows that 74% of the account balances belong to the key employees at 12/31/2018. Do they have to make a top contribution for 2018 or 2019 since they were a safe harbor plan as of 12/31/2017? Thanks!
Pammie57 Posted October 10, 2019 Author Posted October 10, 2019 that was supposed to say top-heavy... not just top contribution.
Lou S. Posted October 10, 2019 Posted October 10, 2019 They lose the get out of top heavy free card for 2018. So if the TH ratio on 12/31/17 was more than 60% they have to satisfy TH minimum contributions for 2018. They lose the ADP/ACP free pass too, have to test for 2018. Since they are at 74% on 12/31/18 - they are TH for 2019. It's a bit too late now but given the facts the client should probably have been advised to keep the safe harbor through 12/31/18 and remove it for 2019 while also informing them of the TH nature of their plan and the implications. Pammie57, Bill Presson and rr_sphr 2 1
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