Safe Harbor "Maybe"

[Guest rslagle224]

Accudraft documents require a Resolution and Notice to adopt the Safe Harbor provisions for a plan year. We have a plan that wants to do the Safe Harbor "Maybe" notice for 2006. Do we (a) have to do a resolution before January 1st, 2006 or do we (b) have to do the resolution before December 1, 2006, when we send the second notice to the employees that the employer has decided to utilize the Safe Harbor povisions or © December 1, 2005 before the employees receive the Safe Harbor "maybe" notice.

[Tom Poje]

By Dec 1, 2005 issue notice that says plan 'might' provide 3% SHNEC.

also make sure document says plan has current year testing.

Technically there should be no other language for safe harbor in the document itself, though I am not sure how things will actually be done.

By December 1, 2006 amend plan to include language for 3% SHNEC if that was decided upon. The language could say 'for 2006 plan year only'

or I guess it could simply say plan provides for 3% SHNEC

Now the notice issued Dec 1, 2006 will say Plan provided 3% SHNEC for 2006. we might provide SHNEC in 2007. cycle is then repeated.

or in the notice say "plan provided 3% SHNEC in 2006 and will provide 3% Shnec next year."

or of course, if no SHNEC was provided, you could issue another 'maybe next year notice.

[Bird]

(b) have to do the resolution before December 1, 2006, when we send the second notice to the employees that the employer has decided to utilize the Safe Harbor povisions

That's it.

We have our notices set up with set up with the "maybe" language and the other yada yada at the top for the following year, and a "Supplemental Notice" at the bottom saying "We WILL make a SH contribution for the current year." For the very first notice, we just don't print the bottom with the supplemental notice.