» Is COVID-19 impacting your ability to make the Safe Harbor Contributions to your 401K Plan?
Remember that you can file a plan amendment removing Safe Harbor with at least 30 days advanced notice to plan participants. The plan administrator can prepare a plan amendment for a nominal fee. However, your Safe Harbor Contribution must be funded from the first day of the Plan Year up to the effective date of the removal. Removing the Safe Harbor will mean that your plan will become subject to ADP Test, ACP Test (if applicable) and Top Heavy Test for the entire Plan Year.Our preferred course of action is to work with your Plan Administrator (TPA) to determine the status of these tests for the prior Plan Year in order to fully inform our clients of the consequences of removing the Safe Harbor. Reviewing whether or not the plan will become Top Heavy is of particular importance.