Safe Harbor 401(k) Plan
No Discrimination Testing for Highly Compensated Employees

Employee deferrals are pre-tax and Employer contributions are tax-deductible
Employees pay no income taxes on contributions or earnings until the participant or their beneficiary receives them
Tax-deferral maximizes the compounding value and increases the participant's ultimate retirement income
Employers pay no income taxes on contributions made to the plan on behalf of the Employees

Employees can elect to defer from 0 up to 100% of their pre- deferred income, up to a maximum of $11,000 ($1,000 catch-up contribution allowed if employee is 50 years old, or older) (refer to Maximum Annual Contributions and Dollar Limits for more detailed information)
Payroll deductions make deferrals convenient and easy
Employee pretax deferrals reduce their Federal, State* and Local* income taxes but are subject to Social Security (FICA) tax
No salary deferral discrimination testing, Highly Compensated Employees (HCEs) are not subject to non-HCE deferral rates. HCEs are guaranteed salary deferrals of up to $11,000
Mandatory Employer contributions of either:
(1) 3% non-elective contribution to all eligible participants or
(2) Basic Matching Contribution equal to 100% match of first 3% of compensation deferred plus 50% match of next 2% of compensation deferred, or
(3) Enhanced Matching Contribution example: 100% match of first 4% of compensation deferred
Mandatory Employer Contributions are 100% vested
Employee deferrals are always 100% vested

Safe Harbor 401(k) Plans are advantageous to the Employer when the Employer:

Wants to eliminate discrimination testing
Wants to give employees the opportunity to enhance their own retirement benefits
Wants employees to make part of the their contributions
Willing to commit to some employer contributions
Wants to limit Employer contribution obligations
Wants flexibility in making profit sharing contributions
Has relatively young key employees
Wants to attract and keep key employees