Changing Safe Harbor Match

[Guest PBJ]

I am curious about when a company can change its safe harbor matching contribution. For example, the annual safe harbor notice was distributed in November 2006 for the 2007 plan year. The notice said that the company was going make the basic matching contribution. Then, in December 2006, the plan was amended to change the matching contribution. The basic matching contribution provision was amended to provide a matching contribution formula that was more generous then the basic matching contribution. Is this a safe harbor enhanced matching contribution? Can the employer do this after it already distributed the notice?

[rcline46]

You must give notice AND give the employees at least 30 days to adjust their contribution level from the date of the notice, even if the 'normal' rules do not provide for a change during this period.

The notice should have been given the instant the amendment was requested. Remember, the (Dec 1) 30 day notice is a SAFE HARBOR date, another date may be reasonable based on facts and circumstances.