Safe Harbor 401k added to PSP

[chris]

Employer has current PSP in place. Employer wants to add safe harbor 401(k) and provide for 3% safe harbor contribution all effective March 1. Employer wants to use age 21 and 1 YOS requirement for eligibility. Employer also wants to benefit current partiicpants in PSP as soon as safe harbor 401(k) is added to PSP. In other words, upon amendment of PSP to add safe harbor 401(k) Employer wants participants in PSP to be able to defer and accordingly be able to receive safe harbor 3% for plan year 2013. Will normal statutory eligibility rules allow this (i.e., all current participants in PSP able to defer and receive 3% safe harbor contirbution) or would plan need to waive age/service requirement for all employees employed as of March 1? Thanks.

[Tom Poje]

if I understand your question correctly, you are simply adding a deferral feature as of March 1. (and by chance a safe harbor as well)

you shouldn't need anything else, document already says 1 yr wait for ps. you are simply adding a deferral (and safe harbor), I assume saying the same (1 yr wait) and all people currently active have already met that eligbility

[chris]

Based on your response eligibility of current participants in the PSP must be taken into account when addressing whether or not they would meet the eligibility requirements of the 401(k) (deferral and safe harbor) and if the participants are already in the PSP, then they will immediately be eligible to defer/receive safe harbor. So then the only reason to consider waiving age/service requirements for all employees employed as of March 1 would be to allow someone who has not yet entered the PSP portion of the Plan to be immediately eligible to defer and receive the safe harbor contribution...? Thanks for your response.

[Tom Poje]

yes, or have immediately eligibility for match and a 1 year for profit sharing (and even safe harbor - but if done with safe harbor you give up the top-heavy free)