What is the latest date that an existing 401(k) plan has to adopt the

[Guest Joe Vasko]

I have read through IRS Notice 2000-3 relating to Safe Harbor 401(k) plans, but have the following question regarding an existing 401(k) plan who wishes to adopt the safe-harbor provision.

Can an existing 401(k) plan still adopt the safe harbor method for the 2000 Plan Year? I read that for 2000, this must be done prior to May 1st and is retroactive to the beginning of the plan year. I see the reason if safe harbor matching contribution method is used, but what if an employer elects the 3% safe harbor nonelective contribution method? Can this be done as late as December 1, 2000 if notice is given to participants prior to this date?

Thanks

JFV

[R. Butler]

For the year 2000, the Employer must have given written notice to all Employees that Employer MAY CHOOSE to adopt a Safe Harbor Plan utilizing the 3% nonelective safe harbor contribution.

If Employer does in fact decide to adopt, the Employee Notification must be given to all employees by December 1, 2000.

Must use the 3% nonelective for Safe Harbors formally adopted after the start of the year.

[Guest Sonia Kapoor]

Correct! But the initial notice, stating that the employer MAY decide to adopt the 401(k) safe harbor must still have been given prior to May 1, 2000 so as to enable the employer to take advantage of the same in PYE 2000.

[actuarysmith]

I agree 100% with Sonia.