Amend SH Plan When Maybe Notice Issued

[Rob P]

I know the topic of amending a SH 401(k) plan during a plan year has been covered pretty well. However, I have a tangent that was touched on but I don’t think ever answered.

My question is if a plan sponsor issues a SH contingent (e.g., “wait and see” or “maybe”) notice and then decides not to give the SH contribution can that plan be amended? Is a plan considered SH for the full year even if it does not give the SH contribution (and just subject to ADP testing)?

In this case we are talking about the plan’s non-safe harbor nonelective allocation formula; client wants to amend from an integrated to a new comp. The plan does have a 1000 hour and EOY requirement (on the non-SH feature).