Amending and Restating Safe Harbor plan into PPA document

[TPAnnie]

May we amend and restate a safe harbor plan effective mid-year into the new PPA document? Or since it's SH, does that keep us from making it affective mid-year?

[Flyboyjohn]

I think you could if you kept everything the same but wouldn't it be easier/better to make the effective date the start of the next plan year?

And remember that if you have any forfeitures you've been applying against the safe harbor contributions you have to stop that now prohibited practice effective for the year after you SIGN the PPA restatement so you may want to wait and SIGN until at least 2015 (or possibly early 2016) if you've got the forfeiture issue.

[John Feldt ERPA CPC QPA]

Also, read the PPA document. I know some documents were framed in such a manner that the forfeiture offset for SH remains in place under the PPA document until the first day of the plan year after the PPA document is executed. Yes, the IRS allowed some plans to be approved with that language.

[Kevin C]

Rev. Proc. 2007-44 (as modified) has the rules for the 6 year restatement cycle. The words "safe harbor" are not in the Rev. Proc. Announcement 2014-16 sets the two year restatement window. It does not mention "safe harbor" either. This is our third restatement cycle for DC plans since safe harbor 401(k) plans became available. If the IRS really intended an earlier deadline and special rules for the timing of restatements for safe harbor plans, my opinion is that they have had plenty of opportunity to say so, but have not done so. There is nothing wrong with having a restatement signed in December and effective January 1, but I see nothing that requires it if you are not making any changes to the safe harbor provisions.

As mentioned, a mid year amendment can not change any of the safe harbor provisions for that year. From 1.401(k)-3(e)(1): "In addition, except as provided in paragraph (g) of this section or in guidance of general applicability published in the Internal Revenue Bulletin (see §601.601(d)(2)(ii)(b) of this chapter), a plan which includes provisions that satisfy the rules of this section will not satisfy the requirements of §1.401(k)-1(b) if it is amended to change such provisions for that plan year." If you are making changes to the safe harbor provisions as part of the restatement, then it would need to be signed before the beginning of the plan year and effective on the first day of the year to comply with 1.401(k)-3(e)(1).