Safe Harbor Contribution Criteria

While employers are obligated to make contributions to all eligible employees, they have two options to choose from in determining the level:

• Basic match contribution, which is a 100 percent match on the first three percent deferred, plus a 50 percent match on deferrals between three and five percent; or
• Three percent non-elective contribution (fixed or "maybe" option). The fixed option is three percent of compensation, while the "maybe" option allows the employer to decide later in the plan year whether to provide a three percent non-elective contribution.

Safe Harbor can be a valuable plan design for employers wishing to forgo certain nondiscrimination testing, but they should be willing and able to make the appropriate contributions to the plan.

Back to Top | Next

Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.

22