Safe Harbor 401(k) Plan Set Up

kristen-rotzenberg

We are in the process of implementing Lawson and are having trouble with the set up of our 401(k) plan. We have a safe harbor plan with a dollar for dollar match (% based on years of service).

The eligibility for the match is a year of service with 1,000 hours. However, employees are able to make their own deferrals at the next entry point after their hire date (April or October). I'm wondering how others have set up the match component of the plan when the eligibility criteria is different for the match and employee contributions.

It would be ideal to tie the two together so that the match is only funded if the employee make deferrals. We suspect that this will need to be set up separately and the match will therefore be funded each pay period regardless of if the employee makes a deferral.

Thank you!

sriman-shivakoti

We have plans similar to that. The match is handled in one plan.

We have one master eligibility group and multiple contribution employee groups.

The reason we have multiple contribution groups is because an employee can have one year of service but not have worked the 1000 hours in the plan year. We monitor that and use a user filed to say they are eligible for the match.

It is simple but complicated. Even if they have the user field flag and are in the match group, based on the plan rules it will not kick in until 1 year of service.