Safe harbor 401(k)

[chris]

Client wants to adopt safe harbor 401(k) effective January 1, 2000. Am I right in thinking that client only needs to set up a plain vanilla 401(k), distribute the notice pursuant to Notice 98-52 in a timely manner, and that client has until December 31, 2000 to amend the plan to bring it into compliance with all safe harbor requirements?

Anything special that needs to be in the intital plan document??

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[Guest JF]

Sounds ok for the doc issues, the IRS has not approved model language and isn't reviewing docs yet with the post '99 language. For now, you have until plan year end 2000 if it isn't extended again for the post 99 stuff. However, the notice must go out by Dec 1 if this is an existing plan.

[Guest Marjorie Rogers]

If the Plan Document provides for discretionary matching contributions you may want to add a provision that limits discretionary matching contributions to no more than 4% of compensation.