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401(k) Safe Harbor Matching
Benefits & Compensation
401(k) Safe Harbor Matching
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Our owner wants to exclude himself from the safe harbor match. I am looking for some documentation or regulation that states this is allowed. Any suggestions?
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Forums  »  Topic Forums  »  Benefits & Compensation  »  401(k) Safe Harbor Matching

401(k) Safe Harbor Matching

posted at 2/26/2010 2:52 AM EST
Posts: 58
First: 12/1/2006
Last: 9/2/2011
Our owner wants to exclude himself from the safe harbor match. I am looking for some documentation or regulation that states this is allowed. Any suggestions?
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401(k) Safe Harbor Matching

posted at 2/26/2010 3:36 AM EST
Posts: 186
First: 4/23/2001
Last: 4/14/2010
First, I don't think you can and, second, I don't think you want to. One of the benefits of the safe harbor is so your highly compensated employees and employees with 5% ownership are not limited in their contributions because of discrimination testing. Why would your owner not want to be included?
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401(k) Safe Harbor Matching

posted at 2/26/2010 6:25 AM EST
Posts: 2146
First: 2/15/2006
Last: 9/14/2011
You need to check your 401k plan document to see how it is written. I doubt that owners can automatically be excluded. If you decide to stop matching for the owner, you would need to amend your plan document to do so. You can't just decide one year that he doesn't want it. This is not a simple process. It actually might cost more to amend than to pay his matching!

And I agree with the other poster that the whole point of Safe Harbor matching is so that the highly compensated employees and owners can contribute without regard to what the non-highly are contributing. A Safe Harbor doesn't have to pass discrimination testing.

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