Revoke 2021 SH Match Notice & Contribution

A Safe harbor Match plan distributed a SH notice for 2021 but now, (12/23/20) would like to rescind the notice, NOT make a SH Match in 2021.  Does the plan need to follow the 30 day notice rules and actually begin SH Match January 2021 or does it make a difference that the year for which the SH Match was promised has not yet started?  

Any time you amend out a SH Match you need to give 30 days advance notice. I'm not aware of any exception that says, unless it crossed a plan year end.

52 minutes ago, Lou S. said:

Any time you amend out a SH Match you need to give 30 days advance notice. I'm not aware of any exception that says, unless it crossed a plan year end.

Not sure I agree. The 30-day advance notice applies when you suspend or reduce safe harbor contributions mid-year. Since the year hasn't started yet, I don't see a problem (employee relations notwithstanding) amending out of safe harbor completely, effective 1/1/2021.

CB I guess that is another way to look at. We've always taken the conservative approach that the 30 day notice period was to designed by the IRS to allow participants time to change their deferral elections if the removal of the SH match caused them to reevaluate their position. But I can see looking at this as an amendment before the year starts and not a mid year reduction and thus not being held to the 30 day notice rule. 

The requirement is that advanced notice must be provided within a "reasonable time" prior to the beginning of the plan year. That requirement is "deemed" to be satisfied if it is provided no later than 30 days before the beginning of the plan year. Depending on the facts and circumstances, one can always argue on reasonableness of time.