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Safe harbor nonelective plan - mid year amendment to exclude bonuses


Belgarath

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Assuming the SH notice is a "maybe not" notice, then such an amendment has the effect of reducing the safe harbor 3% (in this case) contribution. This is permissible under the requirements outlined in 1.401(k)-3(g)(ii), and will take the plan out of safe harbor status for 2024, requiring ADP test for whole year, etc., etc. - all requirements as outlined in the regulation.

Anyone disagree with this outcome?

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"The Employer retains the right to reduce or suspend the safe harbor nonelective contribution under the Plan. If the Employer chooses
to do so, you will receive a supplemental notice explaining the reduction or suspension of the safe harbor nonelective contribution at
least 30 days before the change is effective. The Employer will contribute any safe harbor nonelective contribution you have earned
up to that point. At this time, the Employer has no such intention to suspend or reduce the safe harbor nonelective contribution."

That's what our Corbel/Relius notice says.  So it seems clear to me you can do it.

Austin Powers, CPA, QPA, ERPA

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