Case study
Safe Harbor Match
Two owners, four employees
A Safe Harbor Match removes ADP, ACP and Top Heavy testing, which lets the owners defer the full amount every year without waiting on a test result. The match is immediately vested and it is the only employer contribution in this design.
87.9%
Total contribution to owners
$69,500
Total for owners
$9,600
Cost for employees
| Role | Age | Compensation | 401(k) | Safe Harbor Match | Employer Total |
|---|---|---|---|---|---|
| Caden | 51 | $200,000 | $30,500 | $8,000 | $38,500 |
| Carlie | 45 | $200,000 | $23,000 | $8,000 | $31,000 |
| Employee | 25 | $60,000 | $3,000 | $2,400 | $2,400 |
| Employee | 30 | $60,000 | $3,000 | $2,400 | $2,400 |
| Employee | 45 | $60,000 | $3,000 | $2,400 | $2,400 |
| Employee | 25 | $60,000 | $3,000 | $2,400 | $2,400 |
| Company total | $640,000 | $79,100 | |||
| Total for owners | $69,500 | ||||
| Cost for employees | $9,600 |
Illustrative design based on the assumptions shown. Your own numbers will differ with age, compensation and employee group.
How this design works
- The basic Safe Harbor match formula is 100% of deferrals up to 3% of compensation and 50% of deferrals on the next 2%.
- Maximum match is 4% of pay for anyone deferring 5% or more.
- All Safe Harbor contributions are 100% immediately vested.
Would this work for your company?
The right design depends on your census, your budget and what you are trying to accomplish. Send us your headcount and we will model it against your actual numbers.
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