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Full Version: Safe Harbor and top heavy
BenefitsLink Message Boards > Retirement Plans > 401(k) Plans
philc
Excuse me if this has been asked before -

A safe harbor plan will be deemed to satisfy top heavy if the only employer contributions made are those needed to satisfy the S-H requirement (and no reallocated forfeitures).

What if the additional contribution is the top heavy minimum? Assume the plan is top heavy for the 2003 plan year. The top heavy minimum is made in 2004. The employer wants to go S-H for the 2004 plan year. Will the top heavy minimum contribution made in 2004 prevent the plan from being deemed to satisfy top heavy in 2004? And so on ...
Blinky the 3-eyed Fish
No, the TH contribution you mentioned made in 2004 is for the 2003 plan year. It would not cause you to be outside the safe harbor only contribution in 2004. Think accrual basis.
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