PS Posted July 6, 2022 Share Posted July 6, 2022 Hi, Plan is terminating due to asset sale and the term date is 07/08/2022, since the plan is terminating Mid-year should a safe harbor notice be sent and will an amendment be required? Thanks Link to comment Share on other sites More sharing options...
Bird Posted July 6, 2022 Share Posted July 6, 2022 I think you left something out. Are you trying to make it a SH or is it already SH? Luke Bailey 1 Ed Snyder Link to comment Share on other sites More sharing options...
PS Posted July 6, 2022 Author Share Posted July 6, 2022 1 hour ago, Bird said: I think you left something out. Are you trying to make it a SH or is it already SH? Its a safe harbor plan. Link to comment Share on other sites More sharing options...
ratherbereading Posted July 7, 2022 Share Posted July 7, 2022 I am going to hijack this thread. I have a plan terminating also due to an asset sale effective 8/1/2022. Does a safe harbor 3% need to be done for 2022? 4 out of 3 people struggle with math Link to comment Share on other sites More sharing options...
Belgarath Posted July 7, 2022 Share Posted July 7, 2022 RBR - yes, the 3% is required. The real question is whether you want to revert to ADP/ACP testing or not, and whether to preserve the top heavy exemption. Since due to an asset sale, you have the option to pay the required 3%, and preserve the safe harbor status for the short year, preserve the top heavy exemption, and avoid ADP/ACP testing. (I'm assuming no other contributions that would otherwise invalidate the top heavy exemption anyway.) If you don't choose this option, then you still have to pay the 3% for the short year, but you must test for ADP/ACP, and you lose your top heavy exemption since now it isn't a safe harbor plan. Luke Bailey 1 Link to comment Share on other sites More sharing options...
PS Posted July 8, 2022 Author Share Posted July 8, 2022 On 7/7/2022 at 9:44 AM, Belgarath said: RBR - yes, the 3% is required. The real question is whether you want to revert to ADP/ACP testing or not, and whether to preserve the top heavy exemption. Since due to an asset sale, you have the option to pay the required 3%, and preserve the safe harbor status for the short year, preserve the top heavy exemption, and avoid ADP/ACP testing. (I'm assuming no other contributions that would otherwise invalidate the top heavy exemption anyway.) If you don't choose this option, then you still have to pay the 3% for the short year, but you must test for ADP/ACP, and you lose your top heavy exemption since now it isn't a safe harbor plan. Just pointing to my original question will a Mid-year notification be required and if an amendment be required? Link to comment Share on other sites More sharing options...
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