Retroactive Adoption of Safe Harbor Amendment

[ERISA25]

I am trying to figure out what happens when a Plan is late in signing its amendment to convert a plan to a nonelective “safe harbor.” In this example, assume that Plan A intended to adopt the safe harbor nonelective amendment prior to the beginning of the year, but for some reason failed to do so and the amendment was not signed until November of that first year. Would this mean that they must pass discrimination testing for that year or can they do a VCP to get IRS approval for the adoption of the amendment retroactively to the beginning of the plan year. I have reviewed the regulations and realize that there is not an exception to the 12-month rule (nor anything specific in EPCRS), but I am wondering if anyone has any experience under VCP with this issue.

[Kevin C]

Since you are talking about VCP, I assume that means they did not timely issue a contingent/conditional SH notice and a follow-up notice prior to adopting the amendment? 1.401(k)-3(f).

[ERISA25]

Since you are talking about VCP, I assume that means they did not timely issue a contingent/conditional SH notice and a follow-up notice prior to adopting the amendment? 1.401(k)-3(f).

That's right.