former safe harbor, now trad. 401(k)

[Lori H]

an employer who rescinded safe harbor effective 12/31/03 and for 2004 will be matching 100% up to the first 1 percent deferred is wanting to possibly put in a higher match at the end of the 2004 plan year(12/31) if finances allow for it.

i do not believe that the plan can go back to a safe harbor during the plan year, but is it allowable to make an additional discretionary match at the end of the plan year if the plan was making the 1% match during the course of the year? the trustee's are only wanting to match those participants who are actively deferring so a profit sharing allocation at year end is not an option they want to explore.

they have advised their employees of the safe harbor rescind, the 1% match for the current plan year and the fact that if finances allow for a greater match at years end, they will contribute.

[Archimage]

I think it would be fine as long as your document bases match on a plan year and allows a true up at the end of the year. If the doc states the match is on a payroll by payroll basis then you may be limited.

Some docs are written with two different match formulas, one with a written formula and then a discretionary match on top of that. This may be an option you might want to consider.