If a client sets up a Safe Harbor 401(k) using the 4% match formula for 2005, both the acp/adp tests are passed, correct? Example- 2 owners 10 particpants. Owners defer and one participant defers. If the 4% match is given, auto passage of both the adp and acp test, right?

Assuming the plan meets the requirements of IRS Notice 98-52 (also see IRS Notice 2000-3), the plan is not subject to the ADP/ACP nondiscrimination test. There are more requirements than just providing a 4% match.

With the SH Match, consider Top Heavy, too. Will there be any other contributions? (Profit Sharing or Reallocated Forfs) If there are, you may need to provide a Top Heavy Minimum contribution.