Safe Harbor Notice

[Guest medinael]

A 401(k) plan covers both collectively bargained and non-collectively bargained employees. The plan sponsor has elected to operate the plan as a safe harbor plan in 2008 with a basic match, however, collectively bargained employees will be excluded from the SH match. There are no other employer contributions. The SH notice specifically states that all employees except collectively bargained employees will receive the match. Does the notice need to go to the collectively bargained employees who are eligible to participate in the plan, but not in the Safe Harbor? The portion of the regs discussing the notice requirement only mentions "eligible employees". Does that mean eligible to participate in the Plan, or eligible for the safe harbor contribution? Any insight is appreciated.

[Tom Poje]

one idea is that the notice is an extra reminder to all 'eligible' employees about the right to defer. (so then why aren't regular 401k plans required to 'remind' employees)

in addition, at least with the notices I've seen, they note that if you are a member of the 'otherwise excludable' group, even though you are eligible to defer you won't receive the safe harbor. so these would be people who are 'eligible' but not 'eligible' for everything. I'd say union people fall into that same type of group. If you would provide the notice to otherwise excludables, then I'd provide the notice to union folks as well.