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Safe and sound: How a Guideline Safe Harbor 401(k) helped 4 businesses boost savings and reduce admin work

Safe and sound: How a Guideline Safe Harbor 401(k) helped 4 businesses boost savings and reduce admin work

Chad Hensley
This article includes stories from clients of Guideline. Their views may not be representative of other clients.

While offering a 401(k) may feel like a no-brainer for many businesses, for others, challenges like plan administration and compliance testing can make retirement benefits feel complicated and unmanageable. If you share the same sentiment, Safe Harbors plans offer a solution.

A Safe Harbor 401(k) is a retirement plan that helps businesses meet IRS requirements by automatically passing most discrimination tests.¹ In exchange, they require companies to contribute to their employees' 401(k) accounts — usually via a match. We talked to four Guideline customers about why they chose a Safe Harbor plan and how offering a retirement benefit has helped their businesses thrive.

Safe Harbor plans are easy to manage

Compared to traditional 401(k) plans, Safe Harbor plans offer simplified administration, meaning less time and effort spent on plan management. In fact, plan admin on a Guideline Safe Harbor 401(k) takes less than 30 minutes a month for most plan sponsors.²

"My experience with Guideline has been frictionless," explains Jonna M. from Affogato HR Consulting, a firm that provides human resources advisory services. Affogato HR Consulting first introduced their Guideline 401(k) in 2021 to no fuss and much fanfare. "Nothing has been difficult with setting up our plan or making updates. All of my employees are happy, and so am I."

Guideline customer review

At Guideline, we handle most of the administrative and regulatory work, including government filing, recordkeeping, and custodial services. Our added support gave Jeri A. the peace of mind she needed to offer Rose City Philanthropy's first-ever employee benefit.

"Setting up our 401(k) was so easy," she recalls. "I just checked it off my list and got back to business."

Kali M. shares a similar story as director of administration for Michigan's Children, a nonprofit that advocates for policies and programs to improve the well-being of children and families. "In the beginning, I was nervous and wanted to confirm that we were doing everything right. Whenever I've reached out for support, they're on it and won’t stop until my questions are answered. I’d tell anyone to use Guideline."

Offering a 401(k) with a match can help businesses attract and retain talent

Implementing a Safe Harbor 401(k) not only benefits employers and their employees, but also serves as a powerful recruitment tool. Offering a match allows employers to provide a competitive benefit and demonstrate their commitment to supporting employees' long-term financial well-being.

"As a recruiting and retention tool, it's really nice to say that we have a 401(k) and we offer a match," Jonna shares.

Jeri echoes her enthusiasm: "When we opened up a 401(k), it got a huge response from our team. Everyone enrolled immediately. I'm surprised more of our competitors don't offer one.”

Safe Harbor plans streamline compliance

To ensure everyone can benefit from a company’s retirement plan, the IRS created tests that check if plans give unfair advantages to higher-paid employees. Failing one of these tests can result in expensive corrections, burdensome administrative work, and potentially refunding contributions. Safe Harbor plans simplify this process — they automatically pass most required compliance tests, ensuring fairness among participants.

Guideline customer review

"With our Guideline 401(k), we don't have to worry about compliance," says Jeri. By opting for a Safe Harbor plan, Jeri's team of nonprofit consultants can spend less time worrying about nondiscrimination testing and more time on what matters most — helping foundations, coalitions, colleges, and arts groups raise funds.

Jonna agrees: "I don't even think about taking care of compliance, to the point where if there were ever a compliance issue, I'd be shocked."

Plan sponsors can unlock tax credits and offset administration costs⁵

At first, Jeri worried that the cost of offering a 401(k) could be an issue for Rose City Philanthropy, but now states that Guideline is "one of the least expensive benefits we offer with the biggest impact."

As it turns out, many businesses share Jeri's initial concern. According to a recent survey, over half of businesses that do not offer a retirement plan said they didn't believe they could afford one. However, thanks to additional tax credits introduced by the SECURE 2.0 Act, businesses starting a new 401(k) plan may be eligible to receive up to $16,500 in tax credits over a 3-year period. For many businesses, this credit can offset plan administration costs entirely.⁵ Consult with your tax preparer about the possibility of using this credit.

Safe Harbor plans allow all participants to help maximize their savings

With Safe Harbor plans, all employees have access to the same level of employer contribution, regardless of their income or position within the company.

“We have such a large staff — everything from cleaning services to property managers to our president and COO,” says another Guideline customer who works as a controller for a family office, managing finances, benefits, and staff. “Salaries can vary a lot, but everyone really understands the value of the match.”

Guideline customer testimonial

Jeri agrees, explaining that Guideline gives her team agency over their 401(k). “With Guideline, our employees can self-manage their funds and feel control over their retirement.”

Is a Safe Harbor 401(k) right for my business?

A Safe Harbor 401(k) can be a great solution for businesses of all sizes, offering an inclusive benefit that ensures compliance with IRS requirements and encourages employee participation. Here are a few resources to help you decide if a Safe Harbor plan is right for you:

Get started with a 401(k) designed for your business with Guideline


¹ In general, Safe Harbor 401(k) plans automatically satisfy Top Heavy requirements. One exception is for plan years in which the employer makes discretionary contributions (such as profit sharing contributions) in addition to Safe Harbor contributions. Removing Safe Harbor contributions mid-year will also require plans be subject to all compliance testing. All plans of related entities must be administered by Guideline in order to provide compliance testing.

² Research insights based on data collected in May 2023, from a survey conducted by Guideline that consisted of 73 current customers (34 of whom had a Safe Harbor 401k plan) Though the survey is broad in scope, the experiences of the respondents in this survey may not be representative of all companies.

³ Guideline uses a third-party to provide custodial services. Custodial fees are paid by Guideline.

⁴ All plans of related entities must be administered by Guideline in order to provide compliance testing.

⁵ This content is for informational purposes only and is not intended to be construed as tax advice. You should consult a tax professional to determine what types of tax credits or deductions your company is eligible to claim.