Safe Harbor plan using 3% nonelective. The plan was prepared with an effective date of 7-1-07. The document defined the first plan year as a short PY (7-1 to 12-31). The 3% nonelective is based on compensation for the plan year. For the first year that means from 7-1.

Can the plan be amended now to state the first plan year will be from 1-1 thru 12-31 and still retain its Safe Harbor status inasmuch as the S-H Notice already distributed defined the first plan year as a short PY?

Also - if the Safe Harbor Notice already distributed didn't mention a Match (other Employer contributions), can the plan (same plan as above) be amended to include a Match without jeopardizing the Safe Harbor status?

PMC

The only thing I can think of that will definitely let you get a full year's compensation in for non-elective contribution purposes would be to start a second plan that was effective 01/01/07.

Then you merge the 2 plans into one for 2008. I know it may not seem very elegant but it will allow you to get that part of the job done.

And, I think you can definitely add a discretionary match subject to ACP testing now even though it wasn't available when you first drafted the plan.

Christopher