Stop Safe Harbor on 1/1 - notice requirement

We have a plan that amended their plan to stop safe harbor on 1/1/2025 (signed 10/10/2024) but did not distribute the SMM until 12/20.  The safe harbor notice was not distributed. The regs indicated that the 30 days notice is for plans that are amending DURING the plan year, which this plan is not doing a mid-year amendment.  The SMM requirement is 210 days notice.  Participants are allow to change their deferral election every pay period and they are moving to a fixed match formula that is allocated at the plan year-end.  Has anyone else found specifics on the notice requirement for a beginning of plan year amendment to remove safe harbor? 

See below, the requirement for a safe harbor notice, and I assume the removal of a safe harbor notice, is a facts and circumstances test, it must be a reasonable time period before the plan year.  Whether 11 days was a reasonable time period, is a facts and circumstances determination. Basically, I would ask whether it gave the individuals a long enough time to change their deferrals, or alter there behavior based on the change in the plan.  

https://www.irs.gov/retirement-plans/notice-requirement-for-a-safe-harbor-401k-or-401m-plan#:~:text=General rule%3A Generally%2C the safe,beginning of each plan year. 

"General rule: Generally, the safe harbor notice must be provided within a reasonable period before the beginning of the plan year. The timing requirement is deemed to be satisfied if the notice is provided at least 30 days (and not more than 90 days) before the beginning of each plan year. If the notice is not provided within this time frame, whether the notice is timely depends upon all of the relevant facts and circumstances."

I agree that you end up with facts and circumstances, but not because of the SH rules. The law only addresses advance notice if you want to use the SH provisions. The 210 days after the amendment is adopted to provide a notice (SMM) is a DOL rule. The IRS hasn't issued general notice rules for non-SH plans and it's likely there would be a facts and circumstances test under effective availability. The match is being changed so is there sufficient notice so that participants are able to change elections based on the new match. The fact that it had been a SH plan isn't relevant. What advance notice rules do you apply to your non-safe harbor 401(k) plans that have been amended?        

Well you are not a SH anymore because of the October amendment so you don't have a SH notice requirement right?

I think it does matter whether you were a SH-match or SH-NEC. If you were a SH-match I believe the regs (or an IRS notice) require you continue the SH match for at least 30 days after you issue a notice to participants that it is being discontinued so you would need to continue the SH match through 30 days after 12/20 when the SMM was distributed. OTHO I think your amendment and SMM timing are find if you were eliminating the 3% SHNE which I don't think follows quite the same rules, and your are clearly good for 2025 if you were a "maybe"notice plan.

3 hours ago, Lou S. said:

If you were a SH-match I believe the regs (or an IRS notice) require you continue the SH match for at least 30 days after you issue a notice to participants that it is being discontinued so you would need to continue the SH match through 30 days after 12/20 when the SMM was distributed.

Can you find the reg for that? Meaning, if a SH is NOT ending mid-year, but is ending exactly at year end, a reg says you have to issue a 30 day advance notice to stop the safe harbor from continuing into next year?

1 minute ago, John Feldt ERPA CPC QPA said:

Can you find the reg for that? Meaning, if a SH is NOT ending mid-year, but is ending exactly at year end, a reg says you have to issue a 30 day advance notice to stop the safe harbor from continuing into next year?

Agree with this. I don’t think it’s a thing. You just don’t post the notice for the upcoming year. 

You both may be correct and I may be confusing it with the mid-year guidance in Notice 2016-16. It's possible that I am incorrectly extending the 30 period in accordance with that notice where it may not apply.