Safe-harbor 401(k)

[Guest Ted Kowalchuk, CFP, CFS,]

My client sponsors a safe-harbor 401(k) plan has just filed Chapter 11 bankruptcy. They continue to remit employee salary deferral contributions but stopped remitting the 3% employer contribution in March. Due to cashflow reasons, they probably will not be able to make any more employer contributions. What exactly needs to be done from an a plan administration / compliance standpoint if the employer contributions stop?

[mbozek]

notify the employees that the employer is no longer making a safe harbor contribtion to the plan.