Belgarath Posted February 28, 2022 Posted February 28, 2022 See the following excerpt from IRS Notice 2020-52. the situation at =hand is this: SH nonelective plan, and the HCE's are excluded from receiving the SH contribution, although a "discretionary" SH contribution may be made on their behalf. They want to amend plan to exclude bonuses for Non-owner HCE's. No problem doing this with a 30 day notice, as the bonuses wouldn't be paid until close to year-end (2022) anyway. I'm curious as to opinions on whether the 30 day notice is required in the following particular situation: No notice - just amend currently with no notice (if it ever comes). I think it is, to be safe, but maybe I'm being overly conservative. III. CLARIFICATION OF REQUIREMENTS FOR REDUCING CONTRIBUTIONS MADE ON BEHALF OF HCEs As described in section II.B of this notice, contributions made on behalf of HCEs are not included in the definition of safe harbor contributions. Accordingly, a mid-year change that reduces only contributions made on behalf of HCEs is not a reduction or suspension of safe harbor contributions described in §§ 1.401(k)-3(g) and 1.401(m)-3(h). However, a mid-year change that reduces only contributions made on behalf of HCEs would be a mid-year change to a plan’s required safe harbor notice content for purposes of section III.B of Notice 2016-16. Therefore, in order to satisfy the notice and election opportunity conditions of section III.C of Notice 2016-16, which apply generally to changes that affect required safe harbor notice content and are not reductions or suspensions of safe harbor contributions, an updated safe harbor notice and an election opportunity must be provided to HCEs to whom the mid-year change applies, determined as of the date of issuance of the updated safe harbor notice.1
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