Safe Harbor 3% flip to Safe Harbor Match 4%

[pbarrett]

We have a safe harbor 3% 401(k) plan in place for 2004. Proper notices and such have been given and the doc is in order. The client would like to now switch to the safe harbor match for 2005 and give the 4%, which will save him quite a bit of money. His projected income for 2005 is going to be much lower (or so he thinks). I assume with proper notices and amendments, we can flip from one type of safe harbor to another without any problem? Is there such a thing as a discretionary ps/match safe harbor doc whereby each year (assume election is made timely and before the beginning of the year) they can opt as to which way they want to go????

Anyone run into this?

Appreciate any help here.

[Archimage]

You shouldn't have any problems as long as you follow the method you prescribed. There are plan docs that do offer the flexibility of picking from year to year. Most volume submitter docs that I have seen recently use this and I have seen a couple of prototypes do it as well.