When is the last day that an existing plan can adopt a 3% safe harbor plan? for example, for plan year 2003 is the last day December 1, 2002?

If the existing plan is a 401(k) plan and the 2003 plan year is on the calendar year basis, then the answer is generally yes.

What about if the plan did not exist and is not a successor plan. Actually, let's consider it an employer's first plan ever implemented...

How about for 2004 plan year.

Can one put a Safe Harbor 401k Plan in place for 2004 plan year all the way up to 12/2/2004; use the Safe Harbor Non-Elective contribution and base it on compensation for entire year 1/1/2004 - 12/31/2004. I understand that the documentation cannot be made retroactive to 1/1/2004 for safe harbor, and that a short plan year exists then from 12/2/2004 - 12/31/2004, because employer wants to use calendar year plan year.

This assumes that at plan adoption 12/2/2004 one distributes proper notice to all eligible employee's.

Additional question about what limits have to be pro-rated. I understand compensation limit 401(a)(17) has to be pro-rated as 1/12. So, 205,000/12 = $17,083 is max comp that could be used for all plan purposes?

415 limits have to be pro-rated ?

404 Deduction Rules are different it seems and strictly driven by employers tax year?

Any help is much appreciated.

Thanks.

Safe Harbor plan has to be in existence for at least 3 months. Therefore, October 1, 2004 would be the deadline for a 2004 Safe Harbor 401(k) plan. Notice would have to be by October 1, 2004. [IRS Notice 98-52, 2000-3.] Plan could use either non-elective or matching.

You can avoid prorating by making the profit sharing plan effective 1/1/2004, although the CODA part would be effective 10/1/2004.

Thank you much.