Safe harbor match withdrawal restrictions

[PAL]

I always understood that the safe harbor matching contribution could not be taken as an in-service distribution (including hardship). Is this still correct? We are looking at changing our plan to a safe harbor and in-house counsel has come back and questioned this restriction because they can't find any specific prohibition. As I recall, I thought it was kind of a circular interpretation related to Notice 98-52 but is there something more current I can point to or am I off base with this (I am admittedly behind on completely reading in detail everything that has come out over the past two years!!). Thanks.

PAL

[Archimage]

You are correct. It should be listed in the final 401(k) regs but I can't give you the cite offhand.

[Tom Poje]

As I have to present this in an ASPPA talk very shortly, I can pull the following from the Powerpoint:

the hardship restriction was found in

No hardships permitted on safe harbor contributions Notice 98-52 IV.H

the cross refernce in the code is as follows:

No ADP test if [401(k)-(12)(E) references 401(k)(2) which applies to deferrals]

All eligible NHCEs receive

No hours requirement

No last day rule permitted

100 % vesting

Withdrawal Requirements