adding partipating ER to 401k SH plan

[doombuggy]

I have an established 401k plan with a per payroll safe harbor match.  The owner has a control group of 5 companies, of which the largest/main company is the adopting ER.  The other 4 don't participate but we use their census for testing.

The contact approached us yesterday to see if we can add one of the other companies as an adopting ER ASAP.  Am I correct in assuming that because this is a safe harbor plan, they cannot do this for 2018 since it is already past October 1 (this is a 12/31 PYE)?

Thanks for your thoughts!

[Bri]

I took a quick peek at my Sal Tripodi books, and there's an argument made (in the section on safe harbor plan document requirements) that this simply expands the coverage of an already-existing safe harbor plan, and that this might be interpreted as being similar to a case where a bunch of employees suddenly have a December 1 plan entry date through a plan amendment, for instance.  (This was the 2012 version, though.)

[Larry Starr]

14 hours ago, doombuggy said:

I have an established 401k plan with a per payroll safe harbor match.  The owner has a control group of 5 companies, of which the largest/main company is the adopting ER.  The other 4 don't participate but we use their census for testing.

The contact approached us yesterday to see if we can add one of the other companies as an adopting ER ASAP.  Am I correct in assuming that because this is a safe harbor plan, they cannot do this for 2018 since it is already past October 1 (this is a 12/31 PYE)?

Thanks for your thoughts!

You're not changing the plan to add a safe harbor; you are simply changing the definition of who is a participant.  I would want to look at those examples of mid-year safe harbor changes, but as I recall, you do not have a problem with this modification.

[doombuggy]

TAG seems to be giving us the same answer.  We are making it clear that this company is part of the control group, but doesn't have a plan on its own and wants to adopt this one.  There is no change to the safe harbor, just that it now appears that another part of the control group is going to get it.  The safe harbor match is per pay period.

Thanks for your help everyone!

[Larry Starr]

10 hours ago, doombuggy said:

TAG seems to be giving us the same answer.  We are making it clear that this company is part of the control group, but doesn't have a plan on its own and wants to adopt this one.  There is no change to the safe harbor, just that it now appears that another part of the control group is going to get it.  The safe harbor match is per pay period.

Thanks for your help everyone!

WHICH same answer!  Yours (which supposed you couldn't do it) or ours (which says you could)? I assume "ours"?