first year safe harbor

[wsp]

Getting ready to create plan documents for a new plan. Intent is for plan to be a safe harbor matching contribution plan. Plan year ends 12/31/2006 so we can't be safe harbor for this initial plan year and it's not necessary as the company has 1 owner and 1 employee. Employee won't be eligible until 7/1/2007.

Can I create the documents as a safe harbor plan and the amend the plan so it's not safe harbor for the first year?

Or must I create them as a non-safe harbor and then amend it to be safe harbor on 1/1/2007?

[John Feldt ERPA CPC QPA]

Perhaps the new plan could incorporate a special effective date just for the safe harbor provisions? Most nonstandardized prototypes have a special effective date section.

[Bird]

Depends on your document. If the safe harbor provisions are hard-wired, then it's probably easiest to insert "Effective 1/1/2007" at the beginning of the SH section (if it's a prototype then you hope that there's an option to do that). Of course it's too late for a new SH for 2006 anyway, so maybe the doc has something built in that prevents it from being effective anyway.