Safe harbor 401(k) plans are the most popular type of 401(k) used by small businesses today. Safe harbor 401(k) plans are a great benefit for all employees: by providing a certain contribution to all eligible staff, business owners, and other highly-paid employees, safe harbor 401k plans allow employees to fully save up to IRS limits ($57,000 for 2020, or $63,500 if over age 50).

It may be advantageous for a plan sponsor to consider adopting a traditional safe harbor design for their retirement plan. Adopting a safe harbor retirement plan design permits an employer to essentially avoid discrimination testing (the testing is deemed met).