powerpoint presentation€¦ · 10/17/2016 1 kelsey mayo, as penny sheldon smith, as sheldon...
TRANSCRIPT
10/17/2016
1
◄Kelsey Mayo, as Penny
Sheldon Smith, as Sheldon ►(naturally)
▼Sal Tripodi, as Leonard
Kelly ►Marie Hurd, as Amy
10/17/2016
2
Mid-year changes to Safe Harbor 401(k) Plans
Mid-year changes to Safe Harbor 401(k) Plans
Category 1
Change of PY
Short year must be
sandwiched between 2 SH
years
Adding a SH 401k during a PY• Only if plan is not already a 401k
• May add it up to 1st day of 10th
month of PY
Suspension or Reduction of SH contribution• Plan amendment and timely notice required
• ER must: (1) have provided “Maybe Not” Notice, OR (2)
ER is operating at an economic lossElection
opportunity must be provided
10/17/2016
3
Mid-year changes to Safe Harbor 401(k) Plans
Category 2
Changes in Required Notice ContentGive updated SH notice (may include SMM for SPD-
related info)
• 30-90 days before change becomes effective
• If not practical (e.g., retroactive change), ASAP but no
later than 30 days after change is adopted
Opportunity to change deferral election
• 30-day period before change becomes effective
• If not practical (e.g., retroactive change), ASAP but
starting not later than 30 days after change is adopted
Mid-year changes to Safe Harbor 401(k) Plans Prohibited
Changes
May NOT increase # of years required to fully vest in QACA SH contributions
May NOT narrow eligibility for receiving SH contributions. . . BUT, may change for EEs who are not already eligible
May not change TYPE of SH plan (e.g., 401(k)(12) to QACA
May NOT INCREASE amount of match (or compensation used to compute match), or add discretionary match
10/17/2016
4
Mid-year changes to Safe Harbor 401(k) Plans
Retroactive
Increase In
Matching
Contributions Retroactive increase in match (SH or otherwise) is OK only if . . . Change is adopted AT LEAST 3 months BEFORE
the end of the PY (e.g., by October 1 for CY plan)
Updated notice and election opportunity is provided
Retroactive to first day of PY and applies to entire year
May need to change to PY method of calculating match and make “true up” contributions