Safe Harbor 401k

Employers have always complained about the complexity of 401(k) non-discrimination testing. As a result of failing the testing, many highly compensated employees got refunds. Enter the Safe Harbor 401k. The Safe Harbor 401k did away with most of the complex testing.

At first, there was very little interest in the Safe Harbor 401k. Now the Safe Harbor 401k is by far the most popular type of 401k in the market today.

In order to eliminate the complex testing requirements, a 401k must follow a specific matching formula. To learn more about the matching requirements see our page on Safe Harbor 401k Rules.

There are a few drawbacks to the Safe Harbor 401k, such as the vesting requirement and the requirements on stopping the safe harbor 401k match during the middle of the year. You’ll definitely want to speak with someone about this before you stop making the Safe Harbor 401k match.

Read more see our Safe Harbor 401k Rules.