Safe Harbor NEC to another Plan

[KJohnson]

Can I start up a safe harbor 401(k) Plan 11/15/99 with an April 1 Plan Year; have a first "short year" of 11/15/99-3/31/2000; and make the safe harbor NEC into an already established ESOP that has an April 1 Plan Year. The 401(k) would not be violating the plan year requirement since the first year is more than three months, but would implementing the NEC provision into the ESOP mid-year violate any other "timing" provision?

[MWeddell]

Sounds like this idea will work. Notice 98-52, Sections IX(2) and X are the most relevant to your situation.

This assumes that ESOP eligibility is the same as 401(k) plan eligibility and that other safe harbor conditions (notice timely made, no last day of the plan year or 1,000 hour conditions on ESOP NEC allocation are made, etc.) are met.

[This message has been edited by MWeddell (edited 09-23-1999).]