safe harbor notice

[Guest JJC]

A plan using a prototype document indicates the plan is a safe harbor non-elective 401(k) plan in the document. However, the employer failed to provide the safe harbor notice to the employees.

The ERISA outline book states that "A failure to provide the safe harbor notice would not necessarily mean the section 401(k) arrangement is disqualified. It would, however, mean that the ADP test would be run for the that plan year. To the extent correction of the failure by providing a late safe harbor notice is not available, it seems reasonable that the plan should be able to protcet the qualified status of the 401(k) arragment by simpy running the ADP test (and ACP test if applicable) even though the plan document might state that the plan is intended to be a safe harbor plan."

Assuming the ADP test is run, will the employer still need to make the non-elective contribution? The document states employer will make sh cont. in the amount of...