Mid-year change to safe harbor plan

[Sully]

Employer A is part of a controlled group and sponsors a calendar year 401(k) Safe Harbor Match (4%) Plan, call it Plan A.

Employer B is part of a controlled group with Employer A and has never sponsored or participated in a qualified plan.

We are restating Plan A for EGTRRA and the Employer would like to change the Plan to allow Employer B to participate in the Plan effective 4/1/2010? Can they allow this type of change to a safe harbor plan mid-year? The concern is with the limits on amendments and changes to Safe Harbor plans during the middle of the year.

Thank you in advance.

[austin3515]

The point of the rule is that you're not allowed to change the rules on people mid-year. So you can't change the match formula, etc. This doesn't change the rules on anyone in Plan A, so I would think it would be OK.

What's more, Company B could itself have started it's own SH 401k plan with no problem at all. The fact that you're doing it in one plan should not change the outcome.