So how do I go about getting my bosses to implement this, as I will be getting a bonus next month and will already have maxed my IRA and 401k?
You sound like the perfect candidate then. Go to your smartest/most logical boss tomorrow. Lead off the conversation with something like: "I think I have a way to save the company, you, and I some taxes." Tell him you believe your safe harbor contribution of 3% opens up a gateway for elective contributions in excess of 3% (mine allows for up to 9% total) and you would like to discuss with him and your 401k administrators the possibility of you getting this excess contribution as part of your total compensation package this year. (Aka, in exchange for part/all ofyour bonus, but don't officially document it as such, and don't tell this to the 401k administrator because it irrelevant, all they need to know is boss 1&2, and frugalnacho all get an extra 6%).
Younger people, including me, have another hurdle. These contributions are an allowable, elective disriminatory contribution. This means you are allowed to discriminate but only a little. They test this excess benefit for the value of the benefit when you reach 59.5. So if you are 55 and you get $5k, no sweat, but if you are 30 and get $5k that's worth like $50 or something. The 401k administrator knows all the rules and will tell you what you can and can't do.
Good luck. If it works you could be a hero to the bosses. Or maybe they already do it and don't want you to know about it. But it will save them payroll tax so they should be all for it.
So what's to stop them from doing this with my raise as well? Instead of giving me a 3% raise this year, they could keep my wage the same and just up my 401k compensation from 3% to 6% (or maybe more since they will be saving on taxes)? Seems like a way to get a bunch more money into a tax deferred account that is financially beneficial to everyone except uncle sam.
Also do you have to have maxed out your 401k for this to work, or are they allowed to put excess 401k contributions into the base package for any employees? For example if my coworker is making 50k, and putting 10% in his 401k, then he is only putting 5k into his 401k, could he still negotiate the same thing with his raise and/or bonus to get more into his account without having to defer his wages?
I still don't understand the part about them testing for "excess benefit". Will I be discriminated against, and limited to a lower contribution, since I am only 31 and have a long while until 59.5, and those extra % put into my account now will lead to huge excess benefits on paper 28 years from now? Will I just have to check with the 401k administrator to see what exactly is allowable? We use an investing company (mutual of omaha) to run our 401k, I assume an employee of theirs is paid to be our 401k administrator (instead of my boss actually being the administrator)?