R. Butler
Sep 7 2001, 11:51 AM
Employer wants to adopt a Safe Harbor 401(k) Plan for 2001. Employer has never had a plan. It is my understanding that as long as the plan is adopted by 10/01/01 (it is a calendar year plan) we are O.K. My concern is the notice requirement. If we can get a notice to all employees by the 09/10/01 would that be reasonable considering the employer just decides to adopt a plan on 09/06/01?
Tom Poje
Sep 7 2001, 12:19 PM
yes, you can do that in the case of a new plan (or a new 401k feature added to an existing profit sharing plan)
the notice requirement can be as late as the effective date of the 401(k), but why wait.
Jose Rosario
Sep 7 2001, 12:32 PM
If notice had been given at least 30 days before the
plan year begins, then you'd be deemed to satify the notice requirement. The notice requirement is intended to permit
participants sufficient time to make decisions, especially to
change their deferral rates, presumably to take advantage
of the match feature of the safe harbor plan.
If the plan will permit participants to make changes up
to the 10/1 eff date, then, notwithstanding that they missed
the 30 days by about a week, my opinion would be that the plan has met the "reasonable period" intent of the regs.
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