What is a safe harbor 401k plan? A safe harbor 401 (k) is a type of retirement plan that helps small business owners adhere to the Internal Revenue Service (IRS) test for non-discrimination. It's a way to structure a plan that passes the test or avoids it. Under the non-discrimination test, an employer must contribute the same percentage of salary to each employee's plan.What are the notice requirements for safe harbor insurance? Safe harbor plans have employee notice requirements. Every eligible employee must be notified about their rights under the plan annually. The notice must be given within a reasonable time frame. This is at least 30 days, but no more than 90 days before the beginning of the plan year.How much can you contribute to a safe harbor plan? Employers with safe harbor plans must make contributions to their employees’ plans in order to bypass the standard IRS nondiscrimination testing. They may make a 4 percent matching contribution, a 3.5 percent matching contribution, or a 3 percent non-elective contribution.Can i design a safe harbor plan for my employees? You can design your safe harbor plan to limit any matching contributions to those employees who defer compensation. You can also contribute for all workers. That includes those who don't pay into their own plans. 6