3% Non-Elective Safe Harbor Contributions Effective before deferrals allowed?

Has anyone had any experience with the following (or similar) scenario?

Plan effective 1/1/18 with profit sharing provisions. Elective deferrals are added effective 3/1/18, but the plan sponsor wants to offer the 3% employer non-elective safe harbor contribution effective 1/1/18 (i.e. for the whole plan year, even though deferrals are only allowed for 10 months).

this hardly seems like it would violate anything as they are being more generous than necessary, but I cannot find any authority for allowing such an arrangement. 

Thoughts anyone?  

I would think you would have to do 12 months with 3% SHNE in this situation where you are adding a SHNE to an existing PS plan because you don't have short plan year.

I disagree. I don't think it is required at all to do 12 months.

If a plan is profit sharing only at 1/1/18, and the employer wants to add deferrals and safe harbor provisions later in the year (no later than 10/1 of course), then both the deferrals and S/H contributions could start on the same date and run thru the remainder of the year. 

S/H contributions are not required to run a full year. hence the minimum three month requirement. 

It's not a problem to run it for 12 months.  The safe harbor contribution, itself, really doesn't have to be made to the plan that provides for the deferrals.  So, you'd merely draft the document to provide for the Safe Harbor for the full 12 months.

Good Luck!

We've done something similar many times.  For the initial safe harbor year, we've used compensation for the full year to determine the 3% SH instead of using entry date compensation.  Later years use entry date compensation.  Our VS document has a special effective date section that makes it easy to have the document be clear about how it works.  The SH was still effective on the same date that deferrals started, so those who terminated before deferrals started were not eligible for the SH. 

Whichever route you take, you will want to make sure the document is clear about what will be done.

What you wanted to know is if it is OK to give the 3% for the entire year when the safe harbor provision is added to the plan at a point during the plan year.

The answer is ABSOLUTELY YES.

In fact, that's the way we do it in all of our plans.

Of course, make sure your document provisions are properly selected/executed to match this scenario since most documents allow multiple choices.