Safe Harbor 401k entry date requirements

[Dazednconfused]

Hi,

Is there a requirement in the regs for plans that are 401k safe harbor to have at least quarterly entry dates (for at least the deferrals). I have scanned the regs but so far don't see anything.

Thanks!

[J Simmons]

Hi,

Is there a requirement in the regs for plans that are 401k safe harbor to have at least quarterly entry dates (for at least the deferrals). I have scanned the regs but so far don't see anything.

Thanks!

No

[Tom Poje]

while entry dates are not fixed in stone, 1.401(k)-3©(6)(ii) says a plan may limit the frequency and duration of periods in which a participant may make or change an election for the plan year, and 30 days is deemed reasonable.

I have read that to say you must allow at the minimum monthly changes to any deferral elections.

[K2retire]

Tom, where have you read that? We regularly limit deferral election changes to quarterly or even semi-annual. But we do allow people to stop deferrals at any time, even if there are other limits on changes.

[Tom Poje]

that's my own reading, I am sure others may disagree.

I just don't see any other reason why that particular reg cite would be there.

of course, it gets back to the idea of 'reasonable'. if the plan is a SHNEC, then what difference does it make if someone changes the deferral election. if the plan is a safe harbor match, I could see (the IRS) wanting to give someone the ability to increase or start deferrals at least as often as monthly.

[J Simmons]

I think that the 30 days is a one-time election opportunity after the safe harbor notice is given:

A plan sponsor may limit the frequency and duration of periods in which eligible employees may make or change cash or deferred elections under a plan, provided that, after receipt of the notice described in subsection C of this section V, an employee has a reasonable opportunity (including a reasonable period) to make or change a cash or deferred election for the plan year. For purposes of the preceding sentence, a 30-day period is deemed to be a reasonable period.

Notice 98-52, § V.B.1.c.i.