Determine if SH plan annually

[Basically]

I have never given a client the option, but a financial advisor is asking the question...

Can the plan sponsor decide year to year if their plan is a SH plan or not?  and if so, how does this work?

I know that to be a SH Match, for an existing plan they must decide prior to 1/1 of the new plan year... but a plan can switch mid year to a SH plan by 12/31 if they add a 3% NEC SH contribution (after 12/31 if the NEC is 4%).  Ok, say they did that... that would be amending the plan which would mean the plan is now a SH NEC plan moving forward.  To go back to a non-SH plan, well, another amendment switching the plan back?   I'm getting dizzy just thinking of amending the plan each year.  But.. is that how it is done?  Or maybe I am totally off... you can't do this year to year.  

[Bill Presson]

Of course you can do SHNEC each year but you do have to do an amendment. As you note, you can amend to 3% by 11/30. If you want the next year to start off NOT a SH, just include that in the 3% amendment by saying it’s only for XXXX year. So one amendment per year. 
 

Now I think that’s a real PITA but it can be done. Participants might not like it so much. 

[Liz Hallam]

Bill the yearly amendment requirement is not in all pre-approved plan docs. Some documents have the "maybe" provision.  Says each year we'll determine whether we're SHNEC or not.  Will let you (participant) know via notice (which contains answer for current year and continues maybe to next year). No amendment required. If using that method, review your pre-approved docs.