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Amend Mid-Year to Reduce Safe Harbor 401(k) Match Contributions


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Posted

Plan currently provides SH 401(k) match contribution (100% up to 6%) on a payroll basis.  Can the plan be amended mid-year to reduce the match to 100% up to 4% prospectively for the rest of the year?

Posted

Yes, as long as the safe harbor notice states that the employer may amend the plan to reduce the match, and notice is provided at least 30 days in advance of the change. However the ADP test will be required for the year.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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