counterproductive

Client has a safe harbor non-elective 401(k) stand-alone, you'd think DOL would offer some sort of relief, like "due to CO?VID-19, employers can elect to stop SHNE contributions" without a 30 day notice (since a notice was not required for 2020 anyway; and all employees would know why.  Also, if the client stops the SHNE, thus required to ADP test from the beginning of the year though the date the contribution ceases, obviously the plan would fail ADP.  Isn't the purpose of the SH contribution to avoid any testing issues.

9 minutes ago, thepensionmaven said:

Isn't the purpose of the SH contribution to avoid any testing issues.

Right, but you stopped it,  why should you be entitled to the benefits?

It would be the Internal Revenue Service that would have to provide such relief.  A few organizations have written the IRS requesting various relief which include relief from the 30 days; but none that I have seen are requesting the relief from the test. 

Contribution stopped, agree on that point.  The question is why - contribution was stopped due to unforeseen circumstances (certainly not the client's) that are a result of world-wide pandemic, no ones' fault.

Tests are tests.  I just don't see a public out cry for HCEs being able to contribution more to their 401(k) than NHCE.

11 minutes ago, Degrand said:

A few organizations have written the IRS requesting various relief which include relief from the 30 days; but none that I have seen are requesting the relief from the test. 

ARA has requested relief from testing due to suspension of safe harbor contributions during the this crisis.  

Not too concerned about ADP/ACP.  Worst case some refunds to HCEs, not the end of the world.

Far more significant is relief from TH minimum.  Many key ees will have deferred in Jan/Feb with no concern about TH minimum due to the SH.   Now the company has to stop the SH due to COVID-19, they may or may not be in business by the end of the year, they may be scrambling to stay in business and we are going to hit them with a required 3% TH?  Not good. 

38 minutes ago, shERPA said:

Far more significant is relief from TH minimum. 

Agreed

Agree with shERPA. Don't care about the ADP testing if we can get TH relief.

I guess I am thinking more in terms of changing frequency of the company SHNE, not necessarily a suspension.

Big difference.

2 hours ago, Degrand said:

Tests are tests.  I just don't see a public out cry for HCEs being able to contribution more to their 401(k) than NHCE.

They can, and do, contribute more, it just has to pass testing in certain circumstances.  Personally, I hate the mindset of "leveling the playing field".   But that's another story for another day.