Can you rescind a Safe Harbor Notice?

[Guest SVA Retirement Plan Svc.]

Employer gave out the 2009 Safe Harbor Notice (3% non-elective) in November 2008, however since then the financial situation of the company has changed and they want to change their mind and NOT go with the Safe Harbor in 2009. Can they issue a notice rescinding previous SH Notice, or issue a new "Maybe" notice in its place?? I do not find anything on this out there, but would think many of us have clients asking this question due to the economy.

[Tom Poje]

I think the answer is clear as mud.

a notice given 30 days before hand is deemed to be 'reasonable'. if you go less than 30 days is that ok? I think the iRS has hinted that the answer is possibly 'yes' but certainly not a good habit to get into. And a 3% SHNEC generally is not viewed upon effecting an individuals decision to defer (certainly not to the degree a SHMAC would be)

so, can you amend to eliminate the SHNEC (or at least go "Maybe") as long as you provide the notice before year end...

well, I'd lean toward saying cautiously it could probably be done. (As long as you don't quote me on that!)

In addition, at one ASPPA conference the IRS indicated that you could probably follow the same guidelines as for eliminating a SHMAC, so the possibility seems to exist. but then again, those are comments made that do't necessary represent an actual stance of the department.