Amending a Maybe Safe Harbor Plan

[kgr12]

I know there have been quite a few discussions in this forum about the extent to which mid-year amendments can be made to safe harbor plans and "maybe safe harbor" plans, but my question has to do with the end result if the IRS were to view any such amendment as outside the scope of what's considered "acceptable."

Is the effect merely loss of the safe harbor, or could it also affect the plan's qualification?

I'm dealing with a maybe safe harbor plan that will not be using the safe harbor in 2015, so if adopting a particular amendment results in a worst case scenario, what exactly is that worst case scenario?

Loss of ability to be a safe harbor plan in 2015? (And in this circumstance, where it's a maybe safe harbor that wouldn't be utilized, should I care on any level?)

Plan disqualification? (In which case I obviously do care!)

Anything else?

Thanks!

[Lou S.]

If you are a maybe plan, you aren't a safe harbor plan. Amendment should be no problem.

I think you might lose the ability to change your mind and be a "yes" for 2015 depending on the amendment, but if you are sure you aren't going to use safe harbor shouldn't be an issue.