Does your retirement plan struggle to pass ADP/ACP testing year after year? A Safe Harbor Plan may be the solution to your testing problems! In this video, we discuss several items to consider when determining if a Safe Harbor Plan is right for you.
There are several items to consider when determining if a Safe Harbor Plan is right for you.
Some positive attributes include:
- No annual ADP/ACP Testing
- No return of excess contribution checks to highly compensated employees
- And safe harbor plans can be used to help recruit/attract top talent
Less attractive aspects of Safe Harbor Plans include:
- Once you elect safe harbor status, you are committed for that Plan Year and are restricted from making certain mid-year plan amendments
- Plan forfeitures are either significantly reduced or completely eliminated
- And last, but not least, the potential for increased employer contribution costs
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