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Well, you no longer have a safe harbor plan for last year. Amendments are not prohibited, they just may screw up your safe harbor status, which this one did. You do not correct it; you simply comply with the rules as they now apply, which is no safe harbor status for last year. I would think you would be best served by giving every participant the greater of the non-elective 3% or the safe-harbor match, but you still have to pass the ADP/ACP tests for the year. You would do a -11g amendment by 10/15/18 to bring the folks up the greater of the two items. I suppose you might also be able to get away with applying the 3% non-elective for the period of time up until the amendment and then the match approach for deferrals after that point. Of course, I hope the plan is NOT top heavy, since moving from a top-heaving meeting non-elective to a non-top heavy meeting safe harbor match is not necessarily the best design option.

Just because I express an 'opinion' doesn't make it correct one way or the other. there are some things that perhaps are 'legal' but that doesn't make it 'right'. a good example, I suppose, would be slavery, which was certainly considered 'ok' at one time and protected by the law. so, I guess, at least for me, there is also an 'ethics' that come into the play. again, the fact that no thought of amending the plan for an nhce was ever considered before, and now an obvious hce, only considered an nhce at the momment because of the way the regs are written, well... interesting example of a takeover case for us. cross tested - well, not cross tested - just everyone in their own group.- to avoid the gateway the prior admin provided a 15% contribution to a few NHCEs, the same contribution % as the HCE received. Mathematically this was sufficient to pass nondiscrim testing. this one was really bad in my opinion. the 6 lowest paid NHCEs were chosen. 3 of them were terminated and only 20% vested to make matters worse! Even the iRS has said such plans don't pass the 'smell' test. This is just a short blurb from the IRS, but basically the comments include using the lowest paid folks, those withiout vesting, etc. Although these designs may allow the plan to satisfy the vesting or numeric general tests for nondiscrimination and the associated regulations, they don’t satisfy Treas. Reg. Section 1.401(a)(4)-1(c)(2), which requires that the provisions of Sections 1.401(a)(4)-1 through 1.401(a)(4)-13 be reasonably interpreted to prevent discrimination in favor of HCEs. Page Last Reviewed or Updated: 01-Apr-2016 [https://www.irs.gov/Retirement-Plans/Discriminatory-Plan-Designs-Using- Short-Service] conclusion of the story, we were worried the client was going to be angry because we allocated a gateway to all NHCEs which was more expensive though not that bad.. turns out the client liked out allocation better than what was done in the past.

Ft. William did theirs in April 2017

Please stop.

What the heck is the difference? We know what the resolution is here: amend the plan to conform to the CBA and make contributions (plus earnings, if applicable) accordingly. Next step is VCP, which will be a slam dunk absent bad facts which we don't know about. Having to make this fix and go through VCP is simply the medicine the employer needs to swallow - or its lawyers if there was malpractice involved - for screwing up.

If there was doubt before, recent years’ court decisions recognize one document may state a plan’s provisions [ERISA § 402] and describe the plan to participants and beneficiaries [ERISA § 102]. (For many other kinds of contracts, many people would consider it strange to express a contract in two forms.) The challenge is to think and write carefully so the one document is “written in a manner calculated to be understood by the average plan participant, and [is] sufficiently accurate and comprehensive to reasonably apprise [the] participants and beneficiaries of their rights and obligations under the plan.” Some believe this approach reduces risks that a “plan document” fails to state the provisions the plan’s creator intends, and reduces risks that an “SPD” fails to describe a provision that ought to be communicated to participants (or beneficiaries). In my experience, this method gets improvements if the writer is skillful and the client will pay for the time it takes to do this right. And if either (or both) of those conditions is not met, writing a combined plan-and-SPD might get results no worse than what would have happened with two writings.

It seems to me that the "deferral only" plan could be a non-ERISA plan. The penultimate paragraph of the AO states that a plan will not be forced into ERISA merely because the employer maintains another plan that is subject to ERISA. No distinction is made in the AO between another plan that has matching contributions and one that does not. The issue in the AO seemed to be that an employer match of contributions to Plan 1 (even if the match was made to Plan 2) constituted excessive "employer involvement" in Plan 1. That issue would not be present if contributions to Plan 1 were not matched.