Amend Standard 401k with company match

[thepensionmaven]

Client maintains standalone 401k with match.  Had he give appropriate Not ice of Safe Harbor by Nov 30th, would it have been possible to amend the plan eff 1/1/19 to a safe harbor match?  

There are many employees that are not contributing, causing both ADP and ACP to fail.

This is a standalone plan and employer has not used the PS potion of the plan and does not plan to.

What does he do with the other already in the plan, obviously count them as participants and not match, what about top heavy contribution?

 

[Kevin C]

The timing requirements for the safe harbor notice are in 1.401(k)-3(d)(3).  The notice must be provided a reasonable period of time before the beginning of the plan year.  Your first question implies that a notice was not distributed during the 30 - 90 day window that is deemed reasonable under 1.401(k)-3(d)(3)(ii).  Whether or not the notice is/was provided a reasonable period of time before the beginning of the plan year will depend on the facts and circumstances of your particular case.  The only guidance I'm aware of that deals with late (or missed) notices is informal guidance on the IRS website: https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-failure-to-provide-a-safe-harbor-401k-plan-notice

The timing rules for the amendment that adds safe harbor match provisions to an existing plan are in 1.401(k)-3(e).  The safe harbor match provisions must be in the plan before the beginning of the plan year and remain in effect for the entire plan year.

As for your last question, the participants get what the plan says they get.  The top heavy exemption under 416(g)(4)(H) only applies if the plan is safe harbor for the year and the only contributions for the year are deferrals and ADP/ACP safe harbor contributions. 

 

[thepensionmaven]

Thank you, I was speaking of 2020, I know the Notice rules.

I was questioning the participants who were not contributing; This is the client's only plan, therefore the Notice would take care of top heavy.

Just needed confirmation.

Thanks