Adopting Safe Harbor features to an existing 401(k) Plan

[Guest dhoefer]

When can an existing plan adopt the safe harbor features. For example, we have a plan with a June 30 fiscal year-end, can we amend for Safe Harbor features effective July 1, 2002?

In addition, we would like to convert the plan on May 1, 2002. Do we convert the plan as is and then amend it for July 1, 2002?

Thanks.

[Archimage]

Yes, you have to wait until July 1st to allow for the safe harbor provisions. All participants must receive a notice of the safe harbor provisions 30 days prior to July 1st.

What exactly do you mean by convert?

[Guest dhoefer]

We have an existing 401(k) profit sharing plan and are converting providers. We intend to convert on May 1, 2002, so we will probably convert as a traditional 401(k) PS Plan and then adopt safe harbor status on July 1, 2002.

Make sense?

[Archimage]

Okay. Yes, you will have to basically map the document over and then restate/amend again for July 1st. Hope this helps.

[Guest dhoefer]

Helps a lot...thanks!