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Posted

Client has a safe harbor plan and allowed a hardship distribution to a participant last week.  Current AA does not allow for hardship withdrawals.  Can I retroactively amend a safe harbor plan to add hardships?  I thought that a 30 day notice requirement still existed for making mid-year changes to SH plans.  Does Rev Proc 2019-19 allow for this type of Self-correction?  I could not find any language regarding safe harbor plans.

Thanks for your input.

Posted

cpc0506, Check out Notice 2016-16. This would appear to be a permitted amendment for a safe harbor plan, but may require a new notice under the rules explained in 2016-16, depending on your facts. I would also think that it would meet the requirements for self-correction by amendment under Rev. Proc. 2019-19. Of course, I have not examined your documents or facts, so am treating your question like a hypothetical example.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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