Voluntary After Tax in SH Plan

If a plan adds voluntary after tax (VAT) to a plan, I understand it is tested under the ACP test.

What if it's a Safe Harbor plan?

My question is does the Safe Harbor Match get tested with it?

If a SHNEC is treated as an ACP SH, does that get tested under ACP with the VAT?

Rules are in Treas. Reg. Sections 1.401(m)-3(j)(2), 1.401(m)-3(j)(6), 1.401(m)-2(a)(5)(iv) and 1.401(m)-2(a)(6)(vi).

You are correct that an ACP test is required for a safe harbor plan what allows traditional (non-Roth) employee after-tax contributions.  The match may be included or excluded from that ACP test.  If the plan meets the 401(k) but not the 401(m) safe harbor rules, one can also include just part of the match in the ACP test -- see the regulation for details.

If a SHNEC is used to satisfy the 401(k) safe harbor rules, one can't also use those dollars in the ACP test.

I have a small plan where the owners were the only eligible participants and enjoyed a few years of after large after-tax contributions and no ACP testing on them since all were HCEs and there were no NHCES.  But starting next year there will be a non-key/non HCE and the owners (3) are desparate to keep their after-tax employee contributions going.

The after-tax has to be tested via ACP and there is no safe harbor to get around that.  But the plan does have a 3% non-elective safe harbor.  Based on the original post and reply, am I correct then that if the 401k test would pass on its own (without the 3% SH), then that 3% could be used in the ACP test which in this case might help a little?

The employer could make also make a large QMAC or QNEC just for the NHCE, include that in the ACP test and that would help as well.

Any comments on these options or other recommendations?

Thanks