What happens to my Non Elective Safe Harbor if I close my 401k?

[s299908]

I recently quit my job (10/2020) and have a 401k with a 3% non elective safe harbor. Usually, my employer would make the entire 3% contribution mid February the following year (a 1% match contribution was made on a monthly basis). My question is: If I were to make a cash withdrawal of all my vested funds prior to receiving the 3% SHNEC, what happens? Does my former employer open a new/ reopen my old 401k account to deposit the funds? Do I receive a check? Do I get nothing? I don’t think I’m going to have to do this, but I am curious. Below is some additional information. Thanks for the help!

-I am not a HCE

-I am only expecting about $2000 from the safe harbor

-I am only 30 years old

-I worked 1,500+ hours this year before resigning

[david rigby]

Assuming you remain eligible for the ER contribution, it will be allocated to your account when deposited by the ER, whether or not you have previously withdrawn other amounts.  BTW, be sure to read the "Special Tax Notice" before you take a distribution.

[Lou S.]

As David says you will receive the 3% contribution if they are a nonelective safe harbor plan for 2020, your termination in 2020 does not  change that as safe harbor contribuitions can not have a last day of the year employment restriction.

Whether you can take a distribution now or will have to wait until the contribution is deposited will depend on the terms of the Plan document and the Employer's administrative procedures. It's possible that you can take your funds now and then a second withdrawal after the funds are deposited but you might be charged 2 withdrawal processing fees depending of the how the plan handles that kind of thing. If you don't have an immediate need for the funds or intend to roll  them to an IRA, you might consider waiting until the 2020 safe harbor contribution is deposited to your account for simplicity.

[imchipbrown]

If there are no unvested funds, I'd suggest you leave some money in the account ($50 or so) there's still an account and no re-openning involved.