I have a group of doctors that want to go with a safe harbor plan for 1999 and were told they could make the plan effective 10/1/99 and could defer the full 10K as long as they gave the NHCEs the 3% nonelective.

Under what circumstasnces can this or can't this be done. There is no PS component to the plan. If we added one and the client din't make a PS contribution could they go ahead with the above scenario.

Obviously, we're fishing here.

I'd be very interesred in an opinion here also. I have a profit sharing 401(k) plan being set to now with an effective date of 1/01/99. Deferrals will start mid-November after the 30 days employee notice has run. If the employer puts in the 3% safe-harbor on full-year comp, and has 100,000 of comp and bonuses to be earned in the month and a half until 12/31, can he defer the full $10,000? His full 1999 wiil total $150,000.

Your biggest issue here is IRC 415. The 402(g) limit is based on a calendar year, not a plan year, so this probably wouldn't be affected. But if your first plan year is a short one (10/1 - 12/31 = 3 months), your maximum annual additions are limited to only $7,500. As for setting up a plan retroactive to 1/1, you could not use the safe harbor for 1999 because (I assume) you did not fulfill the notice requirement by March 1, 1999. See IRS Notice 98-52(V)©(2) for more details.