Safe harbor match stopped in mid year

[Santo Gold]

Lots of problems here. Any comments are appreciated:

There is a 401(k) plan with a 6/30/09 plan year end. Safe harbor match contribution. In April, 2009, the employer decides he wants to stop the match. He never tells us (TPA). He claims he provided a 30 day notice stopping the match, but so far, he has not been able to give us a copy. I'm not sure where he would have gotten one from since we did not do one. Maybe the payroll company did one.

(1) If he did provide proper notice, can he stop like that mid-May? Does the documetn need to be amended as well? If he did a notice but not an amendment (and one was needed) is the cessation valid or is the employer on the hook for the rest of the plan year?

(2) Can he stop a safe harbor match in mid-year?

Thanks

[J Simmons]

Lots of problems here. Any comments are appreciated:

There is a 401(k) plan with a 6/30/09 plan year end. Safe harbor match contribution. In April, 2009, the employer decides he wants to stop the match. He never tells us (TPA). He claims he provided a 30 day notice stopping the match, but so far, he has not been able to give us a copy. I'm not sure where he would have gotten one from since we did not do one. Maybe the payroll company did one.

(1) If he did provide proper notice, can he stop like that mid-May? Does the documetn need to be amended as well? If he did a notice but not an amendment (and one was needed) is the cessation valid or is the employer on the hook for the rest of the plan year?

If there was also an amendment to the plan's governing documents as well, and the notice has the 'bells and whistles' needed, then yes the cessation would be valid and stop the SH matching obligations 30 days after that notice was provided.

(2) Can he stop a safe harbor match in mid-year?

Yes, if done correctly. If so, then the entire plan year will be subject to ADP and ACP testing.