![]() Under normal circumstances, and according to final Treasury Regulations, a sponsor of a 401(k) safe harbor plan may amend the plan during the current year to reduce or suspend the company’s safe harbor contribution-either the matching or nonelective contribution-under the following limited circumstances.Ī removal or reduction of a safe harbor contribution mid-year is permitted if the employer either The following outlines the circumstances under which sponsors of 401(k) safe harbor plans may reduce or eliminate employer safe harbor contributions mid-year under normal circumstances, and under the special circumstances outlined in IRS Notice 2020-52 granted as a result of the Covid-19 pandemic. A recent call with a financial advisor from Washington is representative of a common inquiry related to 401(k) safe harbor plans. ![]() We bring Case of the Week to you to highlight the most relevant topics affecting your business. ![]() Under what circumstances, if any, may he reduce or eliminate the company’s mandatory safe harbor contribution during the plan year? Is there any relief granted because of the impact of Covid-19?”ĮRISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare. An advisor calling RLC’s Resource Desk recently asked the following questions: “My client is a business owner and has a standard 401(k) safe harbor plan. ![]()
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