Amending a safe harbor plan mid year
Posted 18 May 2010 - 09:11 AM
Posted 19 May 2010 - 01:22 PM
Posted 19 May 2010 - 05:26 PM
1.401(k)-3(e)(1) General rule. --Except as provided in this paragraph (e) or in paragraph (f) of this section, a plan will fail to satisfy the requirements of sections 401(k)(12), 401(k)(13), and this section unless plan provisions that satisfy the rules of this section are adopted before the first day of the plan year and remain in effect for an entire 12-month plan year. In addition, except as provided in paragraph (g) of this section, a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of § 1.401(k)-1(b) if it is amended to change such provisions for that plan year. Moreover, if, as described under paragraph (h)(4) of this section, safe harbor matching or nonelective contributions will be made to another plan for a plan year, provisions under that other plan specifying that the safe harbor contributions will be made and providing that the contributions will be QNECs or QMACs must also be adopted before the first day of that plan year.
Since neither Roth nor hardship provisions are included in 1.401(k)-3 or 1.401(m)-3, they are not "provisions that satisfy the rules of this section", 1.401(k)-3.
This topic has been argued extensively in other threads.
Posted 20 May 2010 - 08:14 AM
Posted 20 May 2010 - 08:44 AM
I guess it all depends on whether you see the glass as half full or half empty. The IRS refused to say yes, but they also refused to say no. Until they issue further guidance, all we have to go by is the guidance they have already given. I think the final 401(k)/401(m) regulations are pretty clear about what kind of provisions can not be amended mid-year.
Since you seem to interpret this section of the regs as preventing any amendments at all to a SH plan mid-year, I'm curious. Were any of your SH plans restated for EGTRRA mid-year?
Posted 20 May 2010 - 11:14 AM
Posted 20 May 2010 - 03:42 PM
I find this interesting! Does this imply you need this language in the plan in order to make these 2 changes, as no other changes are listed.