Adoption of Non Safe Harbor 401(k) Plan

Have a new client - all employees are family members and all are HCE.  Want to adopt a 401(k) plan for 2018.

I know the 3 month rule for safe harbor plans.  But for non safe harbor plans unable to find specific guidance.  Something from my past says that all participants have to have an effective availability to the Plan.  If all HCEs with the ability to bonus out at end of year for 401(k) any issues with adoption in December for a calendar year plan?

If you want to play it safe(r), make it profit sharing only for 2018 and deferrals/match effective 1/1/19.

If all employees have the same opportunity to defer, then you could make the 401(k) effective in December, but consider the timeliness of the contributions. Assuming at least some of them are W-2 employees, their deferrals must be withheld from their pay by 12/31 and invested within 7 business days*. Will the investment provider be ready to accept contributions by then?

*7 business days is the safe harbor for small plans, and the requirement is that they be segregated from the employer's general assets, not necessarily invested. However it seems unwise to keep the money (which is now a plan asset) uninvested.

I have no problem with it.

We've put in 401(k) plans in December before with no issue. The problem is usually non-discrimination testing but if you have ONLY HCEs eligible you don't have a problem with the testing.

Thanks for replies.

And if it's a brand new company, too, then all the non-HCEs are carved out of the ADP test, leaving you with just the owners/spouses, possibly, to square off against the zero NHCEs in the ADP arena.

I have not seen issues with starting a plan in December (non-Safe Harbor). Make sure you give everyone the required notices within the specified time periods! 

Early in my career (now 43+ years), I thought everyone set

up their calendar year plans in December !