Leaderboard

I see election forms that are 0% but the particpant elects investments for any employer contribution such as profit sharing or non elective safe harbor.

A related question to be aware of is does the plan limit the window for when the high-3 must have occurred? E.g. high-3 out of the last 10 years of employment? This will vary plan by plan.

according to the preamble that just came out The final regulations make two changes in response to these concerns about demonstrating compliance with the requirement that the employer incur a substantial business hardship (comparable to a substantial business hardship described in section 412©). First, the requirement has been modified by replacing the standard in the proposed regulations that the employer have a substantial business hardship (as described in section 412©) with a standard that the employer be operating at an economic loss as described in section 412©(2)(A). This new standard eliminates the requirement to determine the health of the industry (as described in section 412©(2)(B) and ©) or whether the reduction or suspension of safe harbor nonelective contributions is needed so that the plan will continue (as described in section 412©(2)(D)). Second, the final regulations permit an employer to reduce or suspend safe harbor nonelective contributions without regard to the financial condition of the employer if notice is provided to participants before the beginning of the plan year which discloses the possibility that the contributions might be reduced or suspended mid-year. The notice must also provide that a supplemental notice will be provided to plan participants if a reduction or suspension does occur and that the reduction or suspension will not apply until at least 30 days after the supplemental notice is provided. These regulations do not alter the existing ability of a safe harbor plan to use a contingent notice (as described in § 1.401(k)-3(f)(2)) before the beginning of the plan year where the contingent notice indicates that the plan may be amended during the plan year to include safe harbor nonelective contributions and that, if the plan is amended, a follow-up notice will be provided. so I guess I need to add a blurb to the safe harbor notices we are getting ready to send out.