Takeover Plan Issue

[chris]

Just had a handful of safe harbor 401(k) plans walk in my door. They are all on the same prototype document and the prototype sponsor has received IRS approval for its EGTRRA document. Given the timing, I was considering whether or not the safe harbor notice could be given for the plans without having to amend and restate them prior to Dec 31 (or Dec 1 depending on how you see the issue). We maintain all of our documents via a Sungard volume submitter document. In the midst of working on amendments/restatements of current clients' safe harbor 401(k) plans I am mindful of a sponsor not only having to provide the safe harbor 401(k) notice but also having to execute an amendment to specifically invoke the particular 40(k) safe harbor contribution it will be using for the coming year. Hence, my issue as to the takeover plans -- can I just provide safe harbor notice and either look to amend and restate prior to December 31, 2008 (or some time prior to April 30, 2010?) or do I need to have an amendment specifically identifying the safe harbor to be relied upon. If an amendment is required setting forth the actual safe harbor contribution to be used in addition to the safe harbor notice, then it would seem that such an amendment may affect the ability of the plan sponsor to rely on the 6 year cycle. Any help is greatly appreciated.

[Tom Poje]

the notice and plan are completely seperate. the plan only must be in place before the end of the plan year (unless you are talking about a plan that issued a 'maybe' notice, in which the plan has to be amended 30 days prior to the end of the year (but then it is for that year, not the follwoing year, so that makes sense)

the preamble to the final 401k regs specifically states "These final regulations specify that a section 401(k) safe harbor plan must generally be adopted before the beginning of the plan year..."

note it is does not say "At the same time the notice is issued" or "30 days prior to tye beginning of the year"

[chris]

Thanks Tom. I just wanted to check as Sungard Corbel has a separate four line amendment with its EGTRRA safe harbor 401(k) plans which states the specific safe harbor that will be used for the upcoming plan year and future plan years until/unless a new amendment is done. I would feel a whole lot better just giving the safe harbor notice for the takeover plans and then having some additional time to comb through the prototype so that I know it gets amended and restated on our VS document with no issues.

[chris]

So, looks like providing the safe harbor 401(k) notice prior to Dec. 1 and adopting a good faith 415 Amendment prior to Dec. 31 would be in order and amendment/restatement can take place later..... Thanks for your help.