Santo Gold
Aug 14 2006, 10:11 AM
If a Profit Sharing plan uses a points method for allocation (points for compensation increments of $100 plus point for YOS) of employer contribution, is that considered a safe harbor for 401a4 purposes? If not, can it be designed in a way that it would be considered safe harbor?
Steve C
Aug 14 2006, 06:08 PM
Take a look at the uniform points safe harbor found at 1.401(a)(4)-2(b)(3). Your design may qualify, but you still need to be able to show that the average allocation rate for HCEs is no better than the average for NHCEs.