SHNE suspend and then reinstate in same plan year

Is it possible to amend the Plan to stop the safe-harbor nonelective contribution in accordance with Section IV. of Notice 2020-52, but then amend the Plan 30 days before the end of the same plan year to reinstate the safe-harbor nonelective contribution?

Our client maintains a safe-harbor 401(k) plan to which the safe-harbor nonelective contribution is made. The safe-harbor nonelective contribution is funded on a payroll-period basis. The plan year is the calendar year. The client is concerned about its ability to continue to fund this contribution for the rest of this year since Covid-19 has started now to affect its business.

Under Notice 2020-52, the Plan would be amended to suspend the safe-harbor nonelective contribution for payroll periods after August 31, 2020. The amendment would be signed by August 31, 2020 and the notice to participants given no later than August 31, 2020.

If this client is able to find the funds to make the safe-harbor nonelective contribution for payroll periods after August 31, 2020,  is there anything that would prevent the Plan from being amended by December 1, 2020 to provide for the safe-harbor nonelective contribution? The participants would receive notice by December 1, 2020 of the safe-harbor nonelective contribution (this Plan has a discretionary matching contribution which might need the safe-harbor nonelective contribution to satisfy the ACP test, so the notice would be needed.) I don't see any provision in Section 103 of the SECURE Act that would prevent this subsequent amendment. Am I missing anything?

I saw this earlier this week on the RMS website. They are a TPA as well, so buyer beware:

If I Suspend the Contribution, can I Restart the Contribution Later in the Year if Circumstances Improve and Still Retain Safe Harbor Status if I “Make Up” the Contribution?

In the case of a safe harbor matching contribution, because the employees may have changed their deferral elections based on the notice informing them of the cessation of the match, safe harbor status is lost for the entire year.  Although the employer may “make up” the match, employees cannot effectively “make up” deferrals for pay periods that have already passed. 

In the case of a safe harbor nonelective contribution,  because the SECURE Act eliminated the requirement for a safe harbor notice for ADP purposes, and allows for retroactive adoption of a safe harbor nonelective contribution, we believe that an employer COULD stop/restart the contribution during the year and meet safe harbor status as long as the contribution is funded for the entire plan year.  However, we are advising clients who are considering this approach to seek independent ERISA counsel on this matter.  

Does the plan document require the SHNEC to be deposited each pay date?  (I'll be surprised if it does.)  We've had a couple of clients in a similar situation change the timing of deposits for the remaining SHNEC to give them extra time to fund it.  It's an employer contribution, so they should be able to delay SHNEC deposits up to the due date for the employer's tax return, including extensions.  If things continue to go south for the rest of the year, they will probably want to amend by the end of the year to remove the SHNEC effective for 2021. 

Thank you, Mr. Presson and Kevin C, for your responses.

As it turns out, the client is bound and determined to find the funding for this contribution, at least through 2020. We have recommended that they amend before January 1, 2021 to cease the safe-harbor nonelective contribution for 2021. If they can find the funding for 2021, we will then see if there is anything from the IRS that would prohibit them from adding the safe-harbor contribution in 2021.

Kevin C.--you are correct that their document does not require them to deposit the safe-harbor contribution per payroll period. They had just made a commitment to fund it in that manner, and didn't want to stop unless they could no longer afford it.