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Safe Harbor 401(k) Plans were established in the late 1990s by the IRS as a special type of 401(k) based on the benefits provided. 

A Safe Harbor Plan must provide one of the two following benefits:

  • A matching contribution of 100% of the first 3% deferred plus 50% of the next 2% deferred or
  • A 3% contribution to all eligible employees, regardless of their individual election to contribute.

In either case, the "Safe Harbor" contribution above must be fully vested immediately.

A Safe Harbor 401(k) plan is exempt from the discrimination tests required by a Traditional 401(k) Plan.