What Is Safe Harbor Retirement Plan?

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   Christopher Lawrence

   Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey

   A Safe Harbor 401(k) plan generally satisfies the non-discrimination rules for elective deferrals and employer matching contributions. For a 401(k) plan to be considered a Safe Harbor plan, employers must satisfy certain contribution, vesting, and notice requirements. So, let's say you have 25 employees, but only a third of them choose to put money into the plan. There's a formula that limits the amount you can personally contribute to a traditional, non-Safe Harbor plan. Under a Safe Harbor401(k), if you're willing to make a minimum contribution on behalf of your employees, you'll be able to maximize your own personal contributions to the plan. 

   Answered on October 1, 2013

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