204(h) timing

Just thinking out loud here, trying to figure out if my logic is okay....

CB plan is going to cut the contribution credit for the two principals for 2025, which they accrue upon 1000 hours of service.

Plan is getting its restatement for Cycle 3 in the next couple of weeks.  

Typically we'd have the restated doc effective 1/1/25.  That date is, of course, before they'll get a 204(h) notice.

I'm torn between:

a)  So what - give them the 204(h) notice now, so that they get 15 days warning that their benefit rate will drop.  If they happen to hit the 1000 hour mark in the middle of March, then they'd be prohibited from the cutback in the formula and still get their old percentage of pay.

b)  Make the Cycle 3 doc effective March 31, 2025, instead of 1/1/25.  That way they definitely get the notice before the effective date of the drop.

Obviously (b) is okay, but (a) seems like it could potentially still be okay and if it does, at least there's not some kind of weird rando date in the plan's history.

Thoughts?

--bri

First, I think it is a 45 day advance notice, not a 15 day notice -unless you meet the special criteria. 

Secondly, I understand what you are suggesting, but I would keep everything prospective.  If you can get the notice out by March 1st, accruals are frozen on April 15th.  Would be really difficult to work 1000 hours in 3.5 months, so a 2025 accrual is very unlikely.  I don't see any reason to make it part of your restatement effective date.  Just do it as a separate event.