Amnending SH Plan AFTER SH Notice Distributed

Plan distributed the Safe Harbor Notice for 2019 in November 2018 indicating the Safe Harbor Match would be made.  The Employer loses a big customer on December 15th 2018 and on that date they call us to discontinue the Safe Harbor effective 1/1/2019.

Are there any timing restrictions considering the notice was already distributed? Could the plan have been amended on December 15, 2018 to eliminate the safe harbor for ALL of 2019? Or is there some form of a 30 day notice required?
 

Kevin C and Larry Star commented in this thread but it was more of an offshoot the original question.  I wanted a question dedicated just to this topic:

The 30 day thing is just a deemed timely period for the notice.  There is nothing that prevents an employer from amending a 401(k) plan in or out of SH, or changing the form of SH for the following plan year, up thru 12/31.   If it is changed then a new notice is needed ASAP.  Once the new year starts, then the rules limiting SH changes apply. 

This would be a great ASPPA Q&A if there isn;t something concrete out there.  I am inclined to agree with you but, I could also understand someone like me having some reservations considering how many rules there are about amending these plans.  I just like to have official guidance for things like this.

Honestly, I think a reading of -3 of the (k) regs gives us the answers.  Why ask a Q&A that gives an IRS representative the chance to misspeak?   The regs specifically say amended before the beginning of the year. 

Quote

(e)Plan year requirement -

(1)General rule. Except as provided in this paragraph (e) or in paragraph (f) of this section, a plan will fail to satisfy the requirements of sections 401(k)(12), 401(k)(13), and this section unless plan provisions that satisfy the rules of this section are adopted before the first day of the plan year and remain in effect for an entire 12-month plan year.

And the regs specifically say the timing of the notice is based on all relevant facts and circumstances.  I'd say an amendment to the plan is relevant:

Quote

(i)General rule. The timing requirement of this paragraph (d)(3) is satisfied if the notice is provided within a reasonable period before the beginning of the plan year (or, in the year an employee becomes eligible, within a reasonable period before the employee becomes eligible). The determination of whether a notice satisfies thetiming requirement of this paragraph (d)(3) is based on all of the relevant facts and circumstances.

The requirement you cited above (regarding adopting the language before the first day of the plan year) isn't exactly on point because it deals with what must be done to be a safe harbor plan.  We are trying to NOT be a Safe Harbor Plan.  I know, I know, if your plan doesn't have the language and you fail to meet the requirements then you're not a safe harbor plan.  I get that, I just think it's an indirect conclusion. 

I kind of feel the same way about the timing of the notice requirements. Those are the notice requirements for being a safe harbor. 

I think some specific clarification regarding changes to a safe harbor plan after the notice is distributed but before the first day of the plan year would be well received.  I don't doubt what you are saying and in many respects your rationale is completely sound.  If we disagree on anything it's whether or not some additional clarification/guidance would be welcome (even if the guidance merely says that any such amendment would not be treated as a reduction/discontinuance).  That's all I'm looking  for from the IRS.

Be careful what you wish for, you may get it - good and hard.

Look at it this way, if the IRS had wanted to, they could have written the reg to say that the SH provisions had to be in the plan and the SH notice distributed at least 30 days prior to the BOY.  They didn't say this.  

4 minutes ago, shERPA said:

Be careful what you wish for, you may get it - good and hard.

Well by that rationale we'd better cancel the ASPPA Q&A sessions :)

1 hour ago, austin3515 said:

Well by that rationale we'd better cancel the ASPPA Q&A sessions :)

And miss out on discussions like "The Rocky Mountain MEP" from last year? Trademark pending btw...

18 hours ago, shERPA said:

Be careful what you wish for, you may get it - good and hard.

Look at it this way, if the IRS had wanted to, they could have written the reg to say that the SH provisions had to be in the plan and the SH notice distributed at least 30 days prior to the BOY.  They didn't say this.  

Just so everyone knows our prior responses when this came up in the other thread, we have no doubt that there are no timing restrictions on eliminating the plan for 2019 in late 2018, even though SH notices were distributed.  Austin is having trouble accepting that, but that doesn't change the situation, of which (on this one) I am certain.

I am having trouble with something.  On that we certainly agree ?

19 hours ago, austin3515 said:

Well by that rationale we'd better cancel the ASPPA Q&A sessions :)

Didn't the IRS already cancel them?

37 minutes ago, Kevin C said:

Didn't the IRS already cancel them?

They did, ASPPA replaced it with an "ask the experts" panel.

3 hours ago, RatherBeGolfing said:

They did, ASPPA replaced it with an "ask the experts" panel.

This is probably better most of the time anyway.  I'd hazard to guess that Larry occasionally stars as one of the experts, so now Austin's question has been asked and answered!  ?