Retirement Plan Services

401(k) Safe Harbor Plans

A popular version of traditional 401(k) plans, Safe Harbor Plans reduce IRS non-discrimination testing limitations while allowing business owners to maximize contributions to their own 401(k) plans.

  • No discrimination testing when safe harbor rules are met
  • Participant deferral of current income taxes available or pre-payment of income taxes when using Roth option
  • All taxable businesses and tax-exempt organizations (excluding government entities) may establish 401(k) Plans
  • Any employee with 1,000 hours of service within one year and who is age 21 or older must be covered; exclusions are permitted for certain employees
Maximum total plan contribution that the employer may deduct

25% of total eligible payroll (maximum eligible pay per participant is $305,000) plus the amount of elective deferrals contributed

Maximum annual allocation to participant’s account

100% of participant’s total pay or $61,0001, whichever is less

Maximum annual participant deferral (cannot exceed 100% of pay)

Up to $20,5002; catch-up contribution of $6,500 if age 50 or older. Annual participant deferral can be before-tax, Roth after-tax or both, depending on plan terms.

Required employer contribution One of the following:
  • Basic match3 formula (higher than with auto-enroll safe harbor)
  • Enhanced match4 formula
  • Non-elective contribution5


Drop in one of our branch locations or call our One Call Center at (888) 522-2265 for more information or to open an account.

1 The DC annual additions limit is effective for limitation years ending in the calendar year. The dollar limit is increased by the amount of the applicable catch-up contribution.
2 Salary deferrals into other qualified retirement plans count toward the $20,500 personal annual maximum contribution amount.
3 Basic match: 100% of participant contributions up to 3% of pay, plus 50% of participant contributions up to the next 2% of pay.
4 Enhanced match: 100% of participant contributions, but not less than 4% of pay or more than 6%.
5 Non-elective contribution: 3% of pay for all eligible employees, including those who do not contribute.
Investment products are not deposits or obligations of, or guaranteed by Lake City Bank or any other bank, are not insured or guaranteed by the FDIC or any governmental agency and are subject to investment risks, including possible loss of principal invested. Past performance is not a guarantee of future results.

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