Safe Harbor Plan

[Guest Melissa Yoder]

Would an employer that was established on Sept. 15 be able to set up a Safe Harbor 401(k) plan?

[Tom Poje]

1.401(k)-3(e)(2) simply says

in the case of a newly established employer that establishes a plan as soon as administratively feasible after the employer comes into existance.This is the one exception to the rule requiring a safe harbor to be at least 3 months long.

so, you can probably argue you do this.

[SteveH]

I would suggest doing the 3% QNEC if you go that route. I think your argument gets weaker if the owner of the new company puts away $15,000 in the last month of the year, and the rest of the employees have only deferred a couple hundred dollars.