Would anyone be willing to share with me how you handle SH notices for new clients as well as established clients?

[jkharvey]

I'm not looking for any "secrets" or "proprietary" information. I'm just hoping to get some suggestions to help me better handle the SH notice situation in our office. If a new client wants to establish a SH 401k plan and you start discussions w/ them in middle of December, let's say how do you handle the new plan? Let's say you aren't able to get the client to commit to the 401k SH until early in January. Obviously they can't start deferrals until they decide to do a plan. Do you draft a plan document that is effective 1/1/2005 (let's pretend it is 2005) with SH provisions effective 1/1/2005 or do you date the sh 401k provisions later into the year? When do you give the notice? I was under the impression it had to be given 30 days BEFORE deferrals started. My boss says we have up to 60 days AFTER to give notice. I'd like to exchange info with anyone willing to discuss the topic.

[R. Butler]

Let's say you aren't able to get the client to commit to the 401k SH until early in January. Obviously they can't start deferrals until they decide to do a plan. Do you draft a plan document that is effective 1/1/2005 (let's pretend it is 2005) with SH provisions effective 1/1/2005 or do you date the sh 401k provisions later into the year?

We make the safe harbor provisions effective later in the year.

When do you give the notice? I was under the impression it had to be given 30 days BEFORE deferrals started. My boss says we have up to 60 days AFTER to give notice. I'd like to exchange info with anyone willing to discuss the topic.

In the case of a new plan you have up until the day the plan is effective. See Notice 98-52 V.C.2.b.

(Its been a long time since I have done anything with a SIMPLE plan, but I'm guessing your boss is confusing the notice requirements for new Safe Harbor plans with those of new SIMPLE plans. I seem to recall that in the case of a new SIMPLE plan the 60 day notice period could begin anytime prior to the satrt of the year. Thus for a new SIMPLE plan, notice could be given out on 12/31 & participants would have a 60 day election period beginning 12/31 & ending 60 days after.)

[Bird]

We make the deferral and safe harbor provisions effective later in the year, with 30 days notice. I don't think you can do the notice 60 days after the effective date.

There's additional guidance in Notice 2000-3; not necessarily on point to this question buy if you're doing research that needs to be on your list.