401(k) Safe Harbor Eligibility

[Guest WWPDRC]

Can an employer who currently has a simple 401(k) plan amend the plan to a 401(k) safe harbor plan (match) with a 2 year eligibility requirement for participation? The amendment would be effective 01/01/2007.

[Tom Poje]

no. safe harbor gives you a free ride on ADP testing. you can't have a 2 year waiy for deferrals, and therefore the safe harbor follows similar logic. I know its buried in the regs or one of the notices, but I am just too lazy to dig through to find the exact cite.