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Terminating a safe harbor plan


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Guest Celtics

I have a calendar year safe harbor match plan. The client wants to terminate the plan as of 12/31/2013. Can they do that or must they issue a 30 day notice and terminate on the 30th day which means they would need to fund the safe harbor match for anyone who defers in January, 2014. Thanks.

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As ERISA mentions, depending on the circumstances, 30 days advanced notice may be required for mid-year terminations under 1.401(k)-3(e)(4). But, that only applies to a mid-year termination. You are not required to provide advanced notice for a termination at year end.

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