Previously, we provided a Technical Update on minimum gateway contributions (see Minimum Gateway and Safe Harbor Minimum Contribution Requirements). Based on recent inquiries received by our Technical Consulting Department, there still appears to be some confusion on this topic.

Although the basic rule as to when an employer needs to provide the minimum gateway contribution does not change, the application of the top heavy requirements, the addition of a 401(k) and matching features, or the addition of a safe harbor 401(k) feature makes more challenging the determination as to whether a participant must receive the minimum gateway contribution. The following questions identify a few of the most common situations.

The following questions assume a cross-tested profit sharing plan with a last day of the plan year and 1,000 hours of service allocation conditions.

1. If a NHCE participant who is eligible to defer and to receive a match terminates employment before the last day of the plan year, must the plan provide a minimum gateway contribution to that participant?
   
   No. Although the participant is benefiting under the elective deferral and matching portions of the plan, the NHCE participant is not benefiting under the employer nonelective contribution portion of the plan.
   
   
2. Assume the same facts as in question (1) except the plan is top-heavy. Must the plan provide the participant with a minimum gateway contribution?
   
   No. The participant is not entitled to the top-heavy minimum contribution because he/she is not employed on the last day of the plan year. Therefore, the participant still is not benefiting under the employer nonelective contribution portion of the plan.
   
   
3. Assume the same facts as in question (2) except the participant is employed on the last day of the plan year but only completes 900 hours of service. Must the plan provide the participant with a minimum gateway contribution?
   
   Yes. Although the participant is not entitled to the normal allocation because of the 1,000 hours of service requirement, the participant is entitled to the top-heavy minimum. Accordingly, the participant is benefiting under the employer contribution portion of the plan, and is entitled to the minimum gateway.
   
   
4. Assume the employer maintains a top-heavy safe harbor 401(k) cross-tested plan utilizing the safe harbor match. Assume further the participant: (1) is employed on the last day of the plan year; (2) completes only 900 hours of service; and (3) receives a safe harbor match of at least 3%. Must the plan provide the participant with a minimum gateway contribution?
   
   No. Normally, the top-heavy minimum contribution would trigger the minimum gateway but since the match satisfies the top-heavy minimum, the participant is not benefiting under the employer nonelective contribution portion of the plan.
   

In the Cross-Tested Specialty Workshop, we explain both how to calculate the minimum gateway contribution and to whom the plan must provide the gateway contribution. As an added bonus, we have created an easy-reference chart that indicates whether a participant is entitled to the cross-tested allocation, top-heavy minimum and the minimum gateway contribution in 19 different cross-tested plan situations (401(k), safe harbor 401(k), early eligibility, etc.). Please check our Web site for a schedule of our Cross-Tested Specialty Workshops.