Financial Insights that Make Cents

What are the requirements of a Safe Harbor plan?

Employer contribution requirement: Employers must make either a safe harbor matching contribution or a safe harbor non‐elective contribution.

• A matching contribution must equal at least 4% of compensation by using either: the basic formula or enhanced formula. Basic formula 100% of the first 3% of compensation plus 50% of the next 2% of compensation Or Enhanced formula 100% of the first 4% of compensation Elective contributions more than 6% cannot be matched. This does not mean that the match amount cannot exceed 6% of compensation only that deferrals more than 6% cannot be matched. So, a safe harbor matching contribution equal to 200% of 5% is allowed.
• A non‐elective contribution (profit sharing contribution) that equals at least 3% of the employee’s eligible compensation for the plan year. A contribution greater than 3% is allowed.

Vesting Requirement: Safe harbor contributions must be 100% vested. Notice Requirement: Each participant must receive a written notice describing the safe harbor options the employer will use for the plan year 30 days in advance and annually thereafter. According to the SECURE Act, no need for safe harbor notices for non‐elective plans including QACA non‐elective plans. Adoption Requirement: The Internal Revenue Service (IRS) requires the first plan year of a newly established safe harbor 401(k) plan (other than a successor plan) to be at least 3 months long. Exception: Employer Created Within Last 3 Months of the Year The initial year of a safe harbor 401(k) plan can be shorter than 3 months in the case of a newly established employer if the business establishes the plan as soon as administratively feasible after the employer comes into existence. For example, New Biz is incorporated on November 1, 2019. New Biz can establish a safe harbor 401(k) plan that operates for the last 2 months of 2019. An employer with an existing non‐safe harbor plan must make the election to adopt a safe harbor plan design before December 1st in the year preceding the safe harbor plan year. Safe harbor provisions must be in effect for 12 months (effective January 1st). Exception: The SECURE Act permits employers to add a safe harbor feature to their existing 401(k) plans once the year has started if they contribute at least 4 percent of employees' pay instead of the regular 3 percent. This flexibility will help employers to correct failed ADP/ACP or top‐heavy tests by shifting to a safe harbor plan and making a 4 percent nonelective contribution to participants. Distribution Restrictions: Safe harbor contributions cannot be distributed before an employee terminates employment or reaches age 59 ½.

What is a Safe Harbor plan?

Employers can avoid non-discrimination testing (ADP, ACP and Top Heavy) by adopting a safe harbor 401(k) plan. Adopting a safe harbor plan allows highly compensated employees (HCEs) and key employees of the company to contribute the maximum amount allowed by law.

What documents do I need to set up a 401(k) plan for my business?

Adoption Agreement – this document includes: effective date of the plan, age, and service requirements, matching contribution formula if any, profit sharing allocation formula if any, and vesting schedule. Safe Harbor Addendum – required only if the company adopts a safe harbor plan design. This document will specify the type of safe harbor contribution for the plan. Plan Evaluation Survey – includes information about company ownership, lineal relatives, highly compensated employees (HCEs), officers of the company, prior plans sponsored, and ownership of other companies. Board Resolution – official document indicating the owners/officers of the company are authorizing the adoption of the plan. 401(k) Disclosure Statement – discloses certain information regarding compliance testing, fees, and choices that may be more suitable for the company instead of a 401(k) plan. Census Information – a list of all active employees is required including their name, date of birth, date of hire, social security number, and annual compensation.

I need help with the employer portal.

Our Plan Sponsor Web Guide will help you understand what is available within the portal.

How do we add or remove an authorized contact?

To remove an authorized contact, please call us at (800) 356-3009.

I am locked out of my account. How do I regain access?

If you have forgotten your password or username, you can reset both here. If you are locked out of your account, please call us at (800) 356-3009.

How does the Amendment process work?

Upon notification, Slavic401k will complete an Amendment Checklist. The checklist be converted into an amendment and submitted for compliance review. Once compliance review is complete, we will provide you  with the amendment to sign. Once signed, the amendment will be finalized and executed.

How do we make changes to our plan?

Please reach out to your assigned Account Representative and they will be happy to help. If you do not have an account representative, please call us at (800) 356-3009 for assistance.

How does the merge out process work?

You will have a specialist assigned to the merge out within 7-10 business days after the date the request is received. A timeline for the merge out will be set and confirmed with the new TPA. The new TPA will send blackout notices. Plan assets are wired four business days after the liquidation date. The entire merge out process takes approximately 60 days to complete.

We are switching payroll companies. How do we terminate our services with Slavic401k?

Please complete the MEP Exit Policy form and email it to the address listed on the form.