Terminating Safe Harbor 401(k) Plan

[Guest notapensiongeek]

We are terminating a calendar year 401(k) plan effective 11/15/2008. The plan has a 3% SH non-elective contribution. Is there a specific notice requirement for the SHNEC (e.g., 30 days prior to the date of the discontinuance of the safe harbor contributions) or does that advance notice requirement only apply to SH Matching contributions?

[Guest Sieve]

Under the 401(k) regs, there is only a notice requirement when eliminating the SH match, not when terminating. And, ERISA 204(h) does not apply (yet) to a PS or 401(k) plan, even if a matching contribution is mandatory under the terms of the plan.

You may perhaps have an obligation to provide an SMM summarizing the plan's termination amendment (since some of the SPD-described provisions are changing), and you should give notice to employees as a courtesy. But there's no required notice that I know of.

[Guest notapensiongeek]

Thank you Larry!