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February 15, 2009

Safe Harbor 403(b) Plan

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Definition

Nongovermental 403(b) plans that make contributions in accordance with a safe-harbor formula, resulting in the plan not being subject to the ACP nondiscrimination testing. Contributions may be made under one of the following formulas:

1. A basic matching formula,

2. An enhanced matching formula, or

3. A nonelective contribution formula

Referring Cite

IRC § 403(b)(12)(A), IRS notice 89-23,

Additional Helpful Information

Contributions to safe-harbor 403(b) plans are immediately 100% vested

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