Safe-Harbor
Q. Is a plan that makes a safe harbor 3% nonelective contribution exempt from the top-heavy rules? Rev 4-15-03 E-Mail Alert 2003-7, Rev. 3-7-05
A. The safe harbor 3% nonelective contribution may be used to satisfy the top-heavy contribution requirement. Note that if a plan’s only allocations for the year are elective deferrals and an allocation that satisfies the safe harbor 401(k) requirements, the plan is exempt from the top-heavy rules
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