Termination of Safe Harbor 401(k)

[MarZDoates]

Employer maintains a Safe Harbor 401(k) using the basic match formula. The match is calculated for the whole year, versus payroll by payroll. Safe Harbor notices were given prior to the 2006 plan year. The employer wants to terminate the plan effective 12/31/06. Wouldn't he still need to fund the match for the 2006 plan year?

I read some materials, but now I've totally confused myself. Some of the things I read appear to say that you can terminate a s/h 401(k) plan and not provide the safe harbor match as long as you amend the plan to omit the s/h match, notify participants at least 30 days before term date and run the ADP/ACP test.

But haven't the participants "accrued the benefit" since they were given notice at the beginning of the year? In looking at the document (prior to the final 401(k) amendment) it says you have to make the contribution. But not sure how the amendment affects the language.

I hope this makes sense. Thanks to all who can understand my babbling and can provide some input.

[Tom Poje]

1.401(k)-3(g) v says plan satisfies requirements through the effective date of the amendment with respect to amounts deferred. (you have to provide 30 days notice)

I don't see how this can be interpreted other than providing a match up to that point in time.

ERISA Outline Book agree 11.525 (2006 edition)

[MarZDoates]

Thanks, Tom.