QKA-1 Course 9 Safe Harbor 401(k) EXAM QUESTIONS WITH ANSWERS

QKA-1 Course 9 Safe Harbor 401(k) EXAM |\ |\ |\ |\ |\ |\ |\




QUESTIONS WITH ANSWERS |\ |\




What would we have to change in order to become a safe
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harbor?
There are three requirements that you must satisfy to become a
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safe harbor? - CORRECT ANSWERS ✔✔1) The plan would have to
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be amended to reflect the Safe Harbor provisions
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2) Every year you will be required to make a contribution (either
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match of non-elective) to the NHCEs. This contribution is referred
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to as Safe Harbor Contribution
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a. The compensation used for the Safe harbor contributions must
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be nondiscriminatory under the 414(s) rules (this will be
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discussed in another module). |\ |\ |\




b. There cannot be allocation requirements (hours of service or
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last day provisions) for the Safe Harbor contributions
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c. There contributions must be 100% vested and subject to the
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same deferral restrictions as elective deferrals.
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3) You would have to give a notice to employee every year to
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describe their rights under the plan. |\ |\ |\ |\ |\




Plan document requirements for safe harbor: - CORRECT
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ANSWERS ✔✔- The plan document must include Safe harbor |\ |\ |\ |\ |\ |\ |\ |\ |\


provisions.
- These provisions must be in place prior to the beginning of the
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plan year |\

, - This means you can't add the Safe Harbor 401(k) provisions for
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the current year. |\ |\




- We could amend your plan this year to be a Safe Harbor plan
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next year. |\




If establishing a new 401(k) plan, then in order to be a Safe
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Harbor plan, the plan must be _____________________________ For
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example, if you want a calendar year Safe Harbor plan you can
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adopt it as late as October 1st of the first plan year. Thus it
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would be in effect for the period October 1 - December 31. -
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CORRECT ANSWERS ✔✔adopted and effective at least three |\ |\ |\ |\ |\ |\ |\ |\


months before the end of the plan year. |\ |\ |\ |\ |\ |\ |\




If adding a 401(k) feature to an existing profit sharing plan, then
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in order to be a Safe Harbor plan, the feature must be - CORRECT
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ANSWERS ✔✔adopted and effective at least the three months
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before the end of the plan year. |\ |\ |\ |\ |\ |\




Typically, Safe Harbor plan have additional - CORRECT ANSWERS
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✔✔costs and less flexibility |\ |\ |\




The advantage of adopting a Safe Harbor plan is to - CORRECT
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ANSWERS ✔✔avoid testing requirements |\ |\ |\




The Safe Harbor provisions must be adopted and the plan
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document amended prior to the - CORRECT ANSWERS ✔✔start of |\ |\ |\ |\ |\ |\ |\ |\ |\


the plan year to satisfy the Safe Harbor requirements.
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