403(b) and safe harbor 401(k) plan

[R. Butler]

Plan sponsor currently maintains a 403(b) plan, deferrals only. Plan Sponsor wants to adopt safe harbor provisions. Is it permissible for plan sponsor to terminate the 403(b) and adopt a new safe harbor 401(k) mid-year? I'm not clear enough on 403(b) rules to know if I am going to run into issues.

Thanks in advance for any guidance.

[Belgarath]

Shouldn't be any problem. The plan termination creates a distributable event which would allow employees to roll their distributions to the 401(k) plan. The "successor plan" rule similar to 401(k) rules applies only if the employer makes contributions to another 403(b) plan during the "12 month period" beginning on the date of termination and ending 12 months after the distribution of all assets from the terminating 403(b). See 1.403(b)-10(a)(1).

[R. Butler]

Thank you. That was my understanding, but I was a little cautious that I was missing something. Just seemed to easy.

Thank you again.