Participant Notice Requirements for Safe Harbor 401(k) Plans

Employers sponsoring Safe Harbor 401(k) plans must satisfy certain notice requirements. The notice requirements are satisfied if each eligible employee for the plan year is given written notice of the employee’s rights and obligations under the plan and the notice satisfies the content and timing requirements.


Timing Requirement

  •  Notice generally must be provided 90 to 30 days before the beginning of the plan year
  •  Employees who are not yet eligible to make 401(k) contributions on the 90th day before the beginning of the plan year must receive the notice in the 90 days preceding the date they become eligible
  • If a 401(k) contribution feature is added to a Profit Sharing Plan mid-year, notice must be provided in the 90 days preceding the date the employee becomes eligible to make 401(k) contributions
  • Employees must be provided the opportunity to change their 401(k) contribution rates in the 30 days following the date the notice is provided
  • If the initial notice is the “non-committing” notice for the 3% employer safe harbor contribution, a final notice must be provided no later than 30 days before the end of the plan year if the safe harbor is actually adopted
  • If safe harbor contributions are to cease during the plan year, notice must be provided at least 30 days prior to the date the safe harbor contributions cease, and all employee contributions and employer matching contributions are subject to discrimination testing for the plan year

Three Deadlines to Remember for Calendar Plan Years

  1. August 15th – Start plan setup
  2. October 1st – Sign Plan Document and deliver Safe Harbor notices
  3. 1st Pay Date in October – Elective Deferrals must be activated