Rescinding a safe harbor cancellation

[WhoLetTheDogsOut]

An employer adopts an amendment to cease the safe harbor nonelective provision with the appropriate 30 day notice.  Less than a week later, after speaking with the financial advisor, the sponsor wants to rescind that amendment.  Is that possible?  The amendment was executed and the notice distributed but is not yet effective.

[Kevin C]

There is informal IRS guidance on your question.  Question 41 at the 2012 ASPPA annual conference DC Q&A session dealt with the situation you describe.  The IRS representative agreed with the proposed answer that the amendment could be rescinded before it was effective and keep the safe harbor, provided sufficient notice was provided to participants so that their deferral decisions were not compromised by the amendment.