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My suggestion for Adam is to request a copy of the plan document and compare the terms with what he was told by the plan administrator. It has to be provided within 30 days of a request. The plan distribution provisions are usually one of the most complicated portions in an ESOP plan document. I agree with Reality that one should not hazard a guess on its terms here. Generally the law does not protect the form of a plan investment in an ESOP, at least on a per participant basis. So I concur with ESOP Guy here that this can be done. Echoing Reality, however, whether it has been done (or will be) consistent with the terms of the plan document or the prohibited transaction rules on employer stock transactions is not clear from the facts. If a good deal of money is involved, it is up to Adam to make an informed decision on whether he wants to verify this further while he is still a plan participant.

Its likely that no notice is required at all for the SHNEC, so really the only issue is that some participants may have changed their elections for 1/1/26 to get the full match. I could see an argument that they should have a reasonable time to change it less if they want to, but I don't think that is a facts and circumstances argument against the SHNEC. They may defer more in the first pay period than they would have if they had not received a SHN with 4% match. From a compliance perspective, I think they are ok. They may have some upset employees/participants, though.

And the relevant fact and circumstance in my 4% SHNEC example is that everyone gets the same or more from their employer.

Fromt he IRS website: General rule: Generally, the safe harbor notice must be provided within a reasonable period before the beginning of the plan year. The timing requirement is deemed to be satisfied if the notice is provided at least 30 days (and not more than 90 days) before the beginning of each plan year. If the notice is not provided within this time frame, whether the notice is timely depends upon all of the relevant facts and circumstances. (Emphasis Mine)

Thanks everyone. I really like austin3515's suggestion to go with the 4% SHNE. We are possibly adding a Cash Balance Plan and the gateway will be at least 7.5%.

So I think the analysis here is, there is lots of guidance in 2016-16 on mid-year changes to Safe Harbor plans but NOTHING at all regarding amendments made before the beginning of the year, regardless of whether the SH Notice has been distributed or not (I spent some time looking this morning out of curiosity). Switching from match to SH Nonelective is not a "protected benefit" issue. The employer can change its approach before the plan year starts. From an optics perspective with employees (And who knows, maybe one day the IRS) it just looks really bad, since you just told them you were going to give them 4% (assuming they contribute enough of course). But of course this is not an HR / Employee relations forum!

Ditto.

Agreed. And most documents say that the SHNEC is at least 3%, so you may be able to do 4% for 2026 and 3% for 2027 without the need for amendment.

Definitely aggressive to make this change after the notice goes out since participants were eligible for a 4% match and now they will only get 3%. I'll be there will be a lively discussion as to whether or not this can be done. If you want to be lock tight, you could do a 4% SH Nonelective. If you did that, you have no harm no foul every which way you turn and I would have no problem with this change. If you are doing this to max out an owner you would likely be doing a Gateway minimum that is greater than 4% anyway. I don't know if the following will be possible or not, but I would suggest a short plan year from say 1/1/2026 to 3/31/2026. Then have your 3% SHNEC start 4/1/2026 and remain on a 3/31 plan year for a while. If you are trying to max out a calendar year tax payer in 2026, then this probably doesn't work.

Editing my initial answer since I misread the question . You are asking if you can amend the plan by 12/31/2025 for a 2026 change from SHM to SHNE? Technically, you can make the change at any point before the plan year starts. A question that could be asked is whether participants will have a reasonable time to make changes to their elections after you amend, and if they are negatively impacted by the change if they do not have reasonable time to change their elections. I think you are fine since you are providing the SHNEC in place of the SHM and participants will not miss out on any of the employer contributions even if they do not have enough time to change their elections for the first payroll. It would be different if you went from 3% SHNEC to 4% match and a participant did not have time to change their election to receive the full 4% match.

The ASPPA courses look great!

The ASPPA courses: Retirement Plan Fundamentals and Introduction to Retirement Plans are excellent. ERISApedia is also excellent, there are a lot of recorded webcasts on many different topics.

A client has a new employee who needs some training on a few aspects of benefits administration, including both retirement and welfare plans. Any suggestions?

Based on my google search it appears that I have until 12/31/2025 to amend a 401(k) Plan for the 2026 Plan Year regarding the Safe Harbor Match. However, I cannot find anything that specifically states that the Amendment can change the Safe Harbor Method from a SH Match to the SH Nonelective. Is this allowed? The client has already distributed the SH Notice to the Participants stating that the Plan will provide the basic SH Match for 2026. If the 401(k) gurus out there believe I can amend the Plan, then I will prepare a new Notice stating that the Plan will be providing the SH Nonelective rather than the Match. Thanks for any input.

Thank you. I have been talking to the CPA. If my memory is clear I think I basically passed along what you have described. I will follup with them. Thanks for chiming in! I certainly appreciate it!

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That employee must receive a SEP contribution for 2025.

You are right,except: Not only would they need eligible compensation, but the MAGI caps apply. It's October 15, not 31. Technically, April 15 (tax filing due date) with an automatic 6 month extension if they file by tax filing due date. Technically, NIA, which can be earnings or losses If the deadline is missed, a 6% excise tax would be owed on the excess

Agree with Peter. But I know from experience that TIAA will not "treat that estate’s ultimate taker as if she were the plan’s beneficiary or at least a distributee". Also, this sounds like a non-ERISA 403(b), since the spouse is not the default beneficiary. If they are saying the estate is 50% beneficiary, they should be able to explain how and why they cam to that conclusion. Assuming they are right- she might be able to rollover any distribution (made to the estate), to her own IRA ( many PLRs have allowed such rollovers). In this case, it would be her treating herself as the distributee- but she must consult with her CPA or attorney with expertise in such rollovers before completing any such rollover. No- there is no such thing as a see-through estate. PS; the See-through trust would affect only the calculation and the option for rollover. Generally, rollovers are not permitted for estates, but the IRS have made exceptions in cases like the one you describe.

Disregarding the RMD situation. If the IRA beneficiary is an Estate then it would need to follow the 5 year distribution rules. You wouldn't set up inherited IRA's for the beneficiaries of the estate

I'm scratching my head why someone would want to do an in-direct rollover for a Roth conversion.. You can't do a rollover of an RMD nor can you do a Roth conversion of an RMD. It would seem like you have a $22,000 taxable Roth conversion and an $8,000 taxable IRA withdrawal. Without looking up how to fix this, it would seem like you would have to take out the $8,000 with earnings and possibly penalties. Not sure where you are getting the Oct 31, 2026 date.

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No, the bonus check will be issued on 12/31