Change in Plan Year Prior to Establishing Safe Harbor 401(k)

[WDIK]

I would appreciate the expertise of other members of this forum.

The plan year for a safe harbor 401(k) must be twelve months long, unless it is a newly established plan (excluding successor plans) or, under the proposed regulations, a terminating plan.

A current 401(k) plan (not safe harbor) is on a calendar year. If the current plan elects a short plan year, say ending June 30th, can the plan adopt the safe harbor provisions effective July 1st? (This assumes proper notice is given and the safe harbor plan year ends June 30th.)

This scenario seems to meet the requirements of Notice 98-52, but something about it is nagging at me. Thanks for the help.

[g8r]

I don't see anything wrong with it. You'd have a 12 month plan year beginning July 1st and ending on June 30th.