Safe Harbor Notice

[Guest mrjones]

When determing if the annual safe harbor notice was made within the proper timeframe, when is it deemed to have be made? For instance, if it is mailed, is it the postmark or actual date of receipt?

[Bird]

I believe it is the date received. I think the mail date = filed date logic applies to IRS mailings because the PO and the IRS are both "the government" and that logic doesn't help here.

I wouldn't be overly concerned about it; just get it out asap.

[John Feldt ERPA CPC QPA]

Under 1.401(k)-3(d)(3)(i),

--- "The timing requirement of this paragraph (d)(3) is satisfied if the notice is provided within a reasonable period before the beginning of the plan year ..." "The determination of whether a notice satisfies the timing requirement of this paragraph (d)(3) is based on all of the relative facts and circumstances."

That is your technical deadline for the Safe Harbor Notice - a reasonable period before the plan year beginning.

Now, if you want to make sure the IRS does not have any room to question whether or not you gave the notice "within a reasonable period before the beginning of the plan year", then you want to satisfy the next paragrph, 1.401(k)-3(d)(3)(ii),

--- "The timing requirement of this paragraph (d)(3) is deemed to be satisfied if at least 30 days (and no more than 90 days) before the beginning of the plan year, the notice is given..."

The word "deemed" means the IRS can't throw the timing issue in as questionable. We make sure we meet the 30 days with existing Safe Harbor 401(k) plans. But for new plans and plans that want to become Safe Harbor, we sometimes have to ask the client to make a judgement call regarding what they believe a "reasonable period" would be.