Safe Harbor notices

[pmacduff]

I was looking for feedback from others regarding the 2006 safe harbor notices. At the ASPPA conference, everyone was talking about the "new" notice requirements. We have been using a notice which I think is pretty comprehensive, but when I look over the "new" notice template, I see it contains much more information especially regarding "other" employer contributions to the plan, availability for withdrawal of those other contributions, vesting, etc. Is it really required to have all of that additional information in the SH notice? Our notices have always including information regarding eligibility and withdrawal restrictions as it pertains to the safe harbor contributions, but not on the other employer contributions that MAY be made. One of the IRS speakers at the conference said that notices by reference to the doc or SPD that didn't spell things out would probably not be acceptable. any input appreciated.

[Guest BobK]

The specific item that changed is that you no longer can reference the SPD for the vesting and in-service withdrawal restrictions on the safe harbor dollars. It must be spelled out in the notice.

It was interesting that the IRS rep at the Q & A on Wednesday morning at ASPPA after researching this, acknowledged the change but was not sure why the change was made.

[pmacduff]

So Bob - I don't have to include all of that stuff about "other" employer contributions (that MAY be made) in the notice, as long as I include the info relative to the safe harbor? As I mentioned, the model notice I am looking at is VERY comprehensive....

[Guest BobK]

You do have to include that information. The list is in the final regs.1.401(k)-3(d)(2)(ii).

However, you can reference the SPD for other contributions available, plan to which the safe harbor contribution will be made and the type and amount of compensation that may be deferred.

[Guest M. Martin]

Concerning the content of the SH Notices, if the notice has all of the required information as far as eligibility, contribution changes, vesting, employer contributions and withdrawal information, is it acceptable to have a generic reference to contact the "HR Department" for any additional questions or must a specific individual be listed with phone & address information?

The notices we've prepared in the past direct the participants to HR but comments that were made at the ASPPA conference have made us re-think how the notices should be structured. Also, given the fact that the employers have already distributed the old format should a revised notice be distributed if more specific information is required?

Thank you

[Guest BobK]

The regulations state that you must provide information where the participant can get more information.

The regs state that it can be an individual or offices. So, I think you comment about contacting HR would be sufficient.

It would seem to me that if the notice given was incorrect, then a revised notice should be sent out (this was not a very popular position at the ASPPA conference). Unless we get further guidance or relief, I do not see how the answer can be anything else. It is unfortunate that EPCRS does not address how to correct a fautly or missed notice.