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Posted

Sponsor has a 401(k) plan with an EACA provision. They want to change the plan to be profit sharing only, effective as soon as possible. How much notice is required to be given?
I know 30-90 days is best practice - but is that required? Could they make the amendment effective tomorrow? 

I'm a stranger on the internet. Nothing I write is tax or legal advice. 

I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?

Posted

I agree with your comment about best practice. There is no explicit notice requirement for removing an EACA.  There may be a restriction in the text of the plan document.

Check any notes in the Adoption Agreement (those pesky, fine print, italicized, parenthetical comments), and check the Basic Plan Document.

Remember come next year's testing cycle that removing the EACA mid-year takes away the special withdrawal and testing deadline for the entire year.

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