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What exactly does your notice say? The IRS did indicate a few years ago it probably should contain the following: It is the intent that the safe harbor contribution be made throughout the year. There is always the possibility that such contribution will be reduced or suspended during the year. If a reduction or suspension is necessary, a supplemental notice will be provided, and such reduction or suspension will not apply until 30 days after the supplemental notice is provided. I myself would see no problem changing things for 2017 as issuing a new notice at this time still provides people with enough time to 'make an informed decision on deferring"

I have had this argument before and I agree that you CAN remove the safe harbor prior to the first day of the SH plan year. However, I don't think it strictly a yes or no question. First, it depends on if it is a non elective or a match. A non elective I think you can remove at any time prior to the start of the SH plan year since it would not influence NHCEs decision to defer. If it is a match, it comes down to whether the employees had a reasonable opportunity to change their deferral election after the employer amended to remove the SH. Can you show that all employees who wanted to stop deferrals after you eliminated the match had an opportunity to do so? If yes, I think you are in the clear. A small company could easily have all their participants sign something to affirm or change their previous election even with a few days notice. This might be an issue for bigger companies and at that point I think they should stick with the 30 SH suspension notice period. I think there is at least an argument to be made that if an employer cancels the match on 12/31/2016, and cannot show that all employees had a reasonable opportunity to change their election, the employees are entitled to 30 days of matches on their deferrals.

I don't see a problem. Though I'd be getting a supplemental notice out ASAP that the plan is no longer SH.