Submit 401(k) Plan for Determination Letter

[chris]

Client will adopt 401(k) plan effective January 1, 2000. Client will be using the safe harbor rules as per Notice 98-52. Could client wait and submit plan for a determination letter re 401(k) as well as the safe harbor provisions closer to December 31, 2000? (This assumes the IRS would've approved safe harbor language by then.) Otherwise, client would need to get a determination letter re qualification under 401(k) and then get another one re safe harbor provisions. That would probably be the more conservative approach although, if possible, it would be easier to do it all at once. Any comments?

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[MWeddell]

Getting an IRS favorable determination letter is required only when one is using the remedial amendment period (which you're not). Besides, you're proposing to submit the plan by 12/31/2000 anyway, so you'll meet that deadline.

In general, when you apply for the letter is a matter of judgment. I agree that in your situation I'd suggest to the client to wait until later in the year 2000 when the IRS hopefully will be reviewing language for safe harbor 401(k) plans.