Amending Safe Harbor Plans

[MGOAdmin]

I have a client that has a safe harbor match with profit sharing. For 2013, the profit sharing allocation is pro-rata.

Is it possible to amend the 2013 plan to make each participant that own group? Will this cause the plan to lose it's safe harbor status and possibly effect the ADP test?

Are all amendments after year end considered corrective amendments?

I know I could set up a seperate profit sharing plan and just merge the two plans next year, but this is a last resort option.

[MWeddell]

Suppose that the 2013 plan year has ended, e.g. December 31, 2013 was the last day of the 2013 plan year. In that case, you cannot make a discretionary amendment after the plan year has ended, such as changing the allocation method.

Given that the safe harbor matching contribution option is used, any change to the profit-sharing allocation method should not impact the plan's ability to meet the 401(k) / 401(m) safe harbor conditions.

I think you are correct that you could set up a separate profit-sharing plan and later merge it in even if the plan year has ended, but it's been awhile since I've researched that.

[QDROphile]

What year would be ther intitial year of the new profit sharing plan?

[MGOAdmin]

The initial year for the new PS would be 2013 (1/1 - 12/31)

[QDROphile]

How can can you start in 2014 a profit sharing plan for the 2013 calendar year?

[Bird]

You can't amend an existing plan from pro-rata to groups after the end of the year, and you can't start a new plan after the end of the year. Period.