Is there any safe harbor.....

Is there any safe harbor contribution which can be made that excludes ACP testing for a Plan which is allowing voluntary after-tax employee contributions?

We have an Employer who is making a 3% Safe Harbor non-elective contribution (applied only for ADP purposes) with an HCE making such a voluntary after-tax contribution and it is causing an issue with the potential ACP test.

Thanks ahead of time for any guidance you can provide.

After tax contributions are always subject to ACP even in a safe harbor plan.

33 minutes ago, mphs77 said:

Is there any safe harbor contribution which can be made that excludes ACP testing for a Plan which is allowing voluntary after-tax employee contributions?

 

We have an Employer who is making a 3% Safe Harbor non-elective contribution (applied only for ADP purposes) with an HCE making such a voluntary after-tax contribution and it is causing an issue with the potential ACP test.

 

Thanks ahead of time for any guidance you can provide.

No.  Sometimes there is a very clear and simple answer, and that is the case here.  I'm pretty sure we have no safe harbor plans that allow voluntary after tax contributions.

Which is why the use of VATC for "backdoor Roth" IRAs only works (typically) for solo or HCE-only plans, or possibly some very large plans that are not SH but can pass ACP testing. Note you can use QNECs to help pass ACP testing, but you have no safe harbors as our esteemed colleagues stated.