Merger of Safe Harbor Plan

Employer ( controlled group)  has three  plans

403(b) and 401(a) for the not for profit entity

401(k)  Safe Harbor for the for profit entity

The for profit entity will move to a not for profit status  late  in September. The employees in the 401(k) will be enrolled into the 403(b) Plan. They are paid by the employer of the 403(b) Plan.

They want to merge the 401(k) into the 401(a) Plan.

1. Can 401(k)  plan merge mid year since it is s Safe Harbor Plan?

2. Does the 401(k) lose its Safe Harbor status for 2020 since the contributions stop as of 9/1?

3. If the merger is not permitted, does it remain "frozen" for new contribution until it can transfer on 1/1/2021? Again does it lose it's Safe Harbor status in this event?

thanks

1.  I understand that a 401(k) plan feels similar to a 403(b) plan because they are both tax-deferred retirement savings plans.  However, they are subject to different sections of the tax code that don't always communicate well with each other  You cannot merge a 401(k) plan into a 403(b) plan.  Doesn't matter whether it is a safe harbor 401(k) plan.  Doesn't matter whether it is mid-year or as of a plan year end.

2.  Yes, it will lose its safe harbor status.  Furthermore, it is not permitted unless the participant safe harbor notice contained the magic language or the employer is operating at an economic loss.  Consider postponing the change until the plan year ends.  It is permitted to have employees of a not-for-profit entity contribute to a 401(k) plan.

3.  Can't merge the 401(k) plan into a 403(b) plan.

You could merge the 401(k) plan into the 401(a) plan however.