Establishing Safe Harbor 401(k) Plan - Less than 3 months from Adoption Date

A company would like to establish a new Safe Harbor 401(k) plan now (in November) that would fund a 5% Safe Harbor Non-Elective contribution. The plan would be effective 1/1/2020, and the compensation that would be considered for all purposes (including the calculation of the 5% Safe Harbor Non-Elective contribution) would be from 1/1/2020 to 12/31/2020. Is that allowed under the new rules?

Thanks!

No. The deferrals have to be allowed for 3 months.

I agree with Bill.

You could establish a regular 401(k) Plan for 2020 using prior year testing and cap HCE deferrals @5% of pay. That would allow HCE's to contribute 5% of annual pay plus the 2020 catch-up limit if they are 50 or over. It's not the full limit but of your HCEs are over the comp limit of $285K and at least age 50 they could defer $20,750. You amend the plan to SH for 2021 and also remove the 5% of pay cap for HCEs for 2021.

Yes it's allowed but you cannot make salary deferrals in 2020 without testing them and you won't enjoy the TH exemption .  As other have said, the deferral portion of the plan must exist for at least 3 months or you cannot rely on the SH to exempt you from testing.