Safe Harbor Plan Changes

[msmith]

It is now 12/07/2015, and the 2016 Safe Harbor Notice was timely distributed. Can a Plan be amended, effective 01/01/2016 (adopted by 12/31/2015), to make changes that are not referenced by the IRS? A change might be to how a Profit Sharing contribution is allocated for the 2016 Plan Year. The Safe Harbor Notice typically refers the participant to the SPD for the Profit Sharing allocation method and conditions for receiving Profit Sharing.

[Mike Preston]

If the first year the plan is/was a SH is 2016 you can amend anything you want for 2015.

[Tom Poje]

the notice requirement is deemed satisfied if provided 30 to 90 days before plan year begins. that is, people are considered to have ample time to make an informed decision and no one, including the IRS can say they didn't have a 'proper' chance to make an informed decision.

does that prevent you from providing a notice less than 30 days? no, it simply means you don't have a 'guarantee' if someone complains they didn't have ample time to make a proper decision.

If the plan has a 3% SHNEC it is less of an issue since it doesn't really matter how much one defers.

might be more of an issue if there is a match. (note: when asked how to correct. the IRS has responded in such a fashion when asked what happens if no notice has been provided.)

so I would issue a new notice ASAP and go from there

[Mike Preston]

I should read more carefully.