Springing Safe Harbor -- Amendment required each year?

[Guest phy401k]

If a plan has a springing safe harbor non-elective contribution feature, does the plan have to be amended each year in which a safe harbor contribution is made, or is the notice to the employees specifically designating that the safe harbor contribution will "spring" for the year sufficient?

[ETA Consulting LLC]

Not familiar with the semantics; but a cute term. Whatever the case is, you should read and familiarize yourself with the document in order to determine exactly how the safe harbor feature is to be administered. That's not being sarcastic, but merely pointing out that there is some flexibility as to whether an amendment will be done each year or not. Based on my understanding of history of the SHNEC, you couldn't amend out during the year unless you terminated the plan (but that has sense changed). With that understanding, I'd imagine the default is that the plan "may be" amended to provide the SHNEC provided such notice is provided prior to the beginning of the year stating it may happen. I wouldn't know without actually reading the document.

Good Luck!

[Bird]

We do a resolution that says the sponsor elects to administer the plan as a SH plan using the 3% nonelective. It's on a template from our documents provider (Fort William). I think some action like that, akin to an amendment, is required, yes, in addition to the SH notice.

[BG5150]

We do a resolution that says the sponsor elects to administer the plan as a SH plan using the 3% nonelective. It's on a template from our documents provider (Fort William). I think some action like that, akin to an amendment, is required, yes, in addition to the SH notice.

AAAHHHH! You are amending a safe harbor plan mid year!!!!

[Kevin C]

It depends on the document language. Our VS document (ASC) has a provision that if selected, says after providing a conditional notice, the sponsor elects to do the 3% safe harbor by providing a supplemental notice. If they do not provide the supplemental notice, no SH contribution is due. The GUST documents we used from another provider required timely amendments to remove the SH and then add it back in to keep using the conditional SH.