Changing Plan Year in a Safe Harbor Plan

[cpc0506]

Hello.

We have a client that just informed us that they would like to convert their FYE 11/30 safe harbor plan to a FYE 12/31 safe harbor plan, so we would basically have a 12 month SH plan that ran from 12/1/17 to 11/30/18, then a 1 month SH plan (12/1/18 to 12/31/18)  followed by a 12 month SH plan (1/1/19-12/31/19).  So I do believe that we meet the requirements to make this change and keep the SH status intact.  BUT...

My issue is the timing of the amendment, since the short plan year has already started.  The EOB indicates that the amendment should be signed BEFORE the short plan year began, which has not.  Has anyone else ran into this issue?  Or has there be some further guidance that the amendment can be signed after the short plan year begins, but before ends.   Also a concern, is that a new SH notice should have been provided by 12/1/18 for the 2019 PY.

FIY: the plan provides a safe harbor non-elective contribution of 3%.

[Kevin C]

Question 36 from the IRS DC Q&A session at the 2012 ASPPA annual conference dealt with amending a safe harbor plan mid-year to create a short plan year.  The IRS agreed that it was permissible if the conditions in 1.401(k)-3(e)(3) are met, as long as the amendment is adopted by the last day of the short plan year. The question deals with a 7/1 - 6/30 plan year that is amended in September 2012 to create a 7/1/12 - 12/31/12 plan year. 

The only guidance on missed or late safe harbor notices is a page on the IRS website.

https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-failure-to-provide-a-safe-harbor-401k-plan-notice