Mid year amendment to safe harbor plan

[30Rock]

Hello - just wanted some clarification on this issue. A current safe harbor plan provides for an enhanced safe harbor match of 4% and use a payroll computation period. Sponsor wants to increase it this year to 5%. What are the mid year requirements - 30 day  notice, the increase must be retroactive to 1/1/26, can the plan do a true up match retro to 1/1 and then continue with the payroll match going forward, or does the match computation period have to change to annual for the remainder of the 2026 plan year? I appreciate your thoughts!

[FORMER ESQ.]

Is the change really retroactive for the entire plan year under D4 of IRS Notice 2016-16 if the matching contribution is trued-up for a portion of the year and then based on payroll by payroll for the remaining portion? 

[mming]

My first concern would be whether this is even allowed on a retro basis at all since it's a matching contribution, the reasoning being that maybe more participants would've deferred, or perhaps the ones that did would've deferred more had they known of the higher match.

[FORMER ESQ.]

It is allowed under certain circumstances. That is why I mentioned IRS Notice 2016-16, Section D4. 

[30Rock]

I am not sure if you can true up for part of the year and then revert back to payroll. I think the IRS Notice says you switch to annual based match for the year if you want a retro increase.