mid year change to safe harbor matc

[52626]

Safe Harbor Notice states the SH Match will be made each payroll period. The plan sponsor wants to change this to year end. The SH Notice will be updated to reflect the SH Match will be made at year end. NOTE: the Adoption Agreement does not specify the timing of safe harbor match ( operational item) and therefore no amendment is needed.

Doesn't the employer have to make the payroll by payroll match through the end of the 30 day notice. For example if the notice is provided to participants today. doesn't the safe harbor match continue for each payroll period from today to June 30th ( end of 30 day notice period)?

OR can the employer stop the SH Match as of today and just provide the 30 day notice stating effective today the SH Match will be made at year end.

Thanks

[GMK]

I would not change the match until after the 30 day notice period is over. The notice gives people information that may affect their decision on how much, if any, they defer. Someone might think I'll defer X% because I get a match every payday, and that match is earning me money for the rest of the year, but now, I'm just gonna do Y% because I don't get the match until next January.

What matters is that the change in when the match is paid could (may not, but could) affect a Participant's decision (logical or otherwise) about deferring. For that reason, I wouldn't drop the per payroll match until Participants have an opportunity to revise their deferral elections.

[BG5150]

Remember, SH match determined on a payroll basis does not have to be remitted to the plan until the end of the quarter following the quarter the deferrals were made. So, if the ER wants to better manage cash flow, they could make 4 deposits a year.