Safe Harbor Maybe - Amend to Exclude HCE's for 2018?

I have a current small client (approx 15 employees), with a 401(k) Plan with elective deferrals and is 3% Safe Harbor Non-elective Maybe.  The client is deciding on whether to amend to Safe Harbor for the 2018 plan year, so that we can send the required 30 day notices ASAP.  

Question - the plan currently applies the SHNEC to ALL participants, but the client is considering Excluding all HCE's from the allocation in the future, which consists of about 4 employees besides himself.  Can he make this part of the 2018 SH amendment and notify participants now that they the HCE's will not receive a SHNEC for 2018? Or must he wait and amend the plan for 2019 to Exclude HCE's from the SHNEC?  

Thank you! 

3 hours ago, CLKent23 said:

I have a current small client (approx 15 employees), with a 401(k) Plan with elective deferrals and is 3% Safe Harbor Non-elective Maybe.  The client is deciding on whether to amend to Safe Harbor for the 2018 plan year, so that we can send the required 30 day notices ASAP.  

Question - the plan currently applies the SHNEC to ALL participants, but the client is considering Excluding all HCE's from the allocation in the future, which consists of about 4 employees besides himself.  Can he make this part of the 2018 SH amendment and notify participants now that they the HCE's will not receive a SHNEC for 2018? Or must he wait and amend the plan for 2019 to Exclude HCE's from the SHNEC?  

Thank you! 

Rarely have a maybe plan because almost all of our plans are top heavy. But, I don't think you can CHANGE anything for 2018; the notice is that you will (or will not) do what you originally said the provision was; it's do it or not do it. If HCEs deferred knowing there MIGHT be a 3% contribution and then you do the 3% but say "Wait, not for you guys!", I think you have a problem.  Make the change for 2019.

Agreed, I don't think you can change it.

Thank you both - this was my thought process as well, but wanted to be sure.