Safe Harbor Compensation

[mming]

If a 401k plan that uses the 3% NEC safe harbor terminates during the first month or two of the plan year, is it OK to base the 3% contribution on compensation for that short period, or are there a minimum number of months of compensation that must be used?

[Tom Poje]

at the ASPPA conference in Washington, the IRS said you would follow same the rules outlined in the regs for the termination of a SHMAC - e.g. give 30 days notice, test, etc.

of course that was a Q and A, andsuch opinions might not represent actual IRS stance. this was Q and A #12.