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Full Version: Can employer's 3% contribution to a 401(k) safe harbor plan be used as an offset for a safe harbor Floor Offset DB plan?

BenefitsLink Message Boards > Retirement Plans > Defined Benefit Plans, Including Cash Balance

flosfur

Sep 20 2003, 11:14 AM

I know the 401(k) elective deferrals & matching contributions cannot be used as an offset for a "safe harbor" Floor Offset DBP.

Can the 3% contributed to make the 401(k) safe harbor be used for offset?

Blinky the 3-eyed Fish

Sep 22 2003, 09:56 AM

Yes.

flosfur

Sep 22 2003, 01:47 PM

Blinkey, is that by some implication or is there a IRS reg/ruling/notice etc for it?

Blinky the 3-eyed Fish

Sep 22 2003, 02:43 PM

I don't know of a promulgation explicitly allowing such, but I think the logic flows like this. First, you know that the deferrals and match cannot be used in the offset because of the rule (cite not handy) that doesn't allow contributions, except for matching contributions, to be based on deferrals. Safe harbor nonelective contributions are not contingent upon deferrals. Also, safe harbor nonelective contributions can be used as nonelective contribution in the general test and for top heavy. In other words they have similar uses to regular nonelective contributions.

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