pixmax Posted January 24, 2018 Share Posted January 24, 2018 Plan is Safe Harbor match with a discretionary match and after tax option. If the plan does not put in a discretionary match and employees decide to put in a 4% after tax contribution, does this need to be tested under ACP or can it be avoided? Link to comment Share on other sites More sharing options...
Lou S. Posted January 24, 2018 Share Posted January 24, 2018 Yes. After tax contributions are tested under ACP, being a Safe-Harbor Plan does not get you a free pass on voluntary after-tax contributions. You may also run a foul of the free pass on Safe-Harbor exemption, if that is a potential concern, but I'm not sure about that one. Link to comment Share on other sites More sharing options...
Tom Poje Posted January 24, 2018 Share Posted January 24, 2018 after tax has to have ACP testing 1.401(m)-3(j)(6) you can use the safe harbor match in ACP testing as well. 1.401(m)-2(a)(5)(iv) permits you to exclude matching contributions that do not exceed 4% of comp. general consensus is top-heavy free means nothing other than deferral or safe harbor so that is probably ruined. ErisaGooroo 1 Link to comment Share on other sites More sharing options...
Bri Posted January 25, 2018 Share Posted January 25, 2018 I just looked at the Code, hoping that it would say something like a plan where "the only EMPLOYER contributions are...." but it doesn't say that. (Meaning, EMPLOYEE contributions might have been a loophole. But, apparently not, indeed.) Link to comment Share on other sites More sharing options...
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