Save time with our cheat sheets, fact sheets, checklists & books!

February 16, 2009

Nonstandardized Safe Harbor Plan

Your Guide

Print

Definition

A Master&Prototype Plan that would be a standardized plan except that the plan:

  • Is not required, by its terms, to benefit all nonexcludable employees and may, in the case of a defined contribution plan, condition allocations on employment on the last day of the plan year and/or the completion of up to 1000 hours of service during the plan year;
  • May use certain alternative definitions of compensation [ as described in IRC § 414(s) ] determining contributions or benefits that must be tested for nondiscrimination
  • May provide past service credit that fails to meet the safe harbor for certain grants of benefits for past periods ( described in  § 1.401(a)(4)-5(a)(3)).

Referring Cite

Rev. Proc. 2005-16,

Additional Helpful Information

  • The opinion letter issued for the plan will state that the plan is a nonstandardized safe harbor plan.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

More

Keep Learning

Deduction

Definition A deduction is a Tax write-off which is allowed for contributions to traditional IRAs or employer sponsored plans. Individuals who are active participants are

Annual Addition Limit

Definition The annual Addition limit is the maximum amount that may be added to a defined contribution plan on behalf of a participant for any

SIMPLE 401(k) Plan

Definition A SIMPLE 401(k) plan is a 401(k) plan  established by a small business for it’s employees. Earnings accrue on a tax-deferred basis and distributions

Salary Deferral Contribution

Definition A contribution made pursuant to a participant’s election to have a portion of his/her salary/wages  contributed to his/ her employer sponsored plan  rather than

Be among the first to know when

IRA Rules
Change