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Safe Harbor
A plan option that can help business owners maximize savings and pass compliance testing.
What is a Safe Harbor?
Safe Harbor is a type of employer contribution that can be added to a 401(k) plan to help the plan pass compliance testing. A 401(k) Safe Harbor can boost participation in your retirement plan, enabling owners and highly compensated employees to contribute more money to their own retirement account.
How Safe Harbor Works
Safe Harbor is a type of employer contribution that is added to a 401(k) plan to help business owners and highly compensated employees save more for retirement while helping the plan pass compliance testing. There are three types of contributions an employer can choose from: non-elective, basic match, and enhanced match.
Why Safe Harbor is Important
Adding a Safe Harbor provision to your 401(k) plan allows the plan to pass compliance testing. This means highly compensated employees can maximize their annual personal contributions. And if you choose a Safe Harbor match, you’re incentivizing enrolled employees to increase their retirement savings themselves.
How Fisher\SMB™ Can Help
Fisher\SMB is one of America’s top advisory firms with deep experience helping business owners navigate the ins and outs of evaluating and setting up a Safe Harbor strategy tailored to meet their specific objectives.
Downloadable Guide
Safe Harbor
Find out what business owners need to know about adding a Safe Harbor to their 401(k) plan:
- Learn how a Safe Harbor 401(k) works
- Consider when a Safe Harbor makes sense
- Review Safe Harbor scenarios
There are Three Options for Safe Harbor Contributions
Non-Elective Safe Harbor
Eligible employees get an annual employer contribution of 3% of their salary. This amount is immediately fully vested and the employee gets it whether or not they contribute to the plan.
Basic Safe Harbor Match
The employer matches 100% of the first 3% of each employee’s contribution and 50% of the next 2%. Employees are required to contribute to their 401(k) in order to get the match.
Enhanced Safe Harbor Match
The employer matches 100% of the first 4% of each employee’s contribution. Like a Basic Safe Harbor Match, employees are required to defer money to their 401(k) in order to qualify for the match.
Case Study
Safe Harbor
Consider how highly compensated employees can maximize their 401(k) contributions.
- Run the numbers for three principals at a law firm.
- See how much this one change increases their 401(k) savings.
- Find out if you’re a good fit for a Safe Harbor 401(k).
Contact Us
One of our 401(k) business specialists would love to talk to you about your company’s retirement plan needs.
Call Us
(844) 238-1247
Learn MOre About
Safe Harbor for Businesses
The Keys to 401(k) Compliance Testing
Simple tips to pass your 401(k) compliance test, avoid penalties, and support fair retirement savings. Learn about HCEs, Safe Harbor plans, and key deadlines.
9 Essential Questions About Safe Harbor 401(k) Plans
Discover how Safe Harbor 401(k) plans help business owners avoid compliance testing, maximize contributions, and support employee savings. Learn about plan types, benefits, and when it makes sense to upgrade.
What Every 401(k) Admin Should Know About Corrective Distributions
Even companies with a great retirement plan can fail compliance testing. If your 401(k) distributions are found to be “top-heavy,” you may need to make corrective distributions. Read the article to learn more.