Safe Harbor 401(k) - Amend Profit Sharing Plan for 2002

[MarZDoates]

I have a client that has an integrated Profit Sharing Plan. It is a calendar year plan. They want to add a Safe Harbor 401(k) for 2002.

By what date must the plan be amended?

By what date must the notice to employees be giving?

I've looked at Notice 2000-3 and Notice 98-25. It is my understanding that they have up until October 1, 2002 to amend their Profit Sharing Plan to a Safe Harbor 401(k). However; I am uncertain as to when the notice must be given.

Also, is there any where I can find a sample notice which contains the required language?

Any clarification is greatly appreciated! Thanks.

[Guest Joe Vasko]

An existing PS Plan can be amended to a Safe Harbor 401(k) Plan up to 90 days prior to the end of the Plan year. A 30 day notice is required to be given to all eligible participants. A sample notice was given a few posts back. Look for the post with an attachment.

[Tom Poje]

assuming the plan you mentioned has no 401(k) arrangement, then the notice can be given as late as the effective date of the 401(k) arrangement

Q-11 of notice 2000-3 (such plans are treated as 'new' plans.)

In other words, the 30 day notice is waived for the first year of a new plan. or another way of thinking of it:(example)

pretend all employees were hired June 1 (treat as if they are all new eployees). New plan begins June 1.

You do not have to give 30 day notice to new employees, you simply tell them a safe harbor exists.

the 401k arrangement must be at least 3 months long if they wait forever to put it in.

[Belgarath]

MarZDoates - a bit of non pension trivia here which your handle brought to mind. As a kid, when I heard the nursery rhyme, I just heard it as "Maresy doates and dozy doates...etc." I've never understood what the heck the nonsense rhyme was supposed to mean.

Just recently, I stumbled across it in print, and was astonished to learn that it is really "Mares eat oats and Does eat oats, and Little Lambs eat ivy." Oddly enough, when we were laughing about this, several people confessed that they were under the same misunderstanding as I was. So for any of you out there who never knew this, Happy Monday!

[MarZDoates]

Joe and Tom: Thanks for the input. I was able to find the sample notice. Much appreciation!

[MarZDoates]

Belgareth: As a child, I didn't get it either. Learned the correct "language" later in life. Anyway, that's what my mama used to call me and I thought it would make a unique handle. Glad you got a chuckle!! --------Mary