Home / News & Updates

401K Safe Harbor Plan Notices

Within a reasonable period before any year, each eligible employee must be given written notice of
their rights and obligations under the 401(k)arrangement. The notice must be accurate,
comprehensive, and written in understandable language. It must be provided at least 30 days
(and no more than 90 days) before the beginning of the plan year. Employees who become eligible
after the first day of the plan year must receive notice no more than 90 days prior to their eligibility
date and no later than the eligibility date.

Generally, the notice must accurately describe 
    (a) the safe harbor matching or enhanced matching formula used under the plan (including a 
    description of the levels of any matching contributions and whether the match is to be calculated 
    on an annual or per-pay-period basis). 
    (b) any other contributions under the plan (including any discretionary matching contributions). 
    (c) the plan to which safe harbor contributions will be made if different than the plan containing the 
    401(k) arrangement. 
    (d) the type and amount of compensation that may be deferred under the plan. 
    (e) how to make cash or deferred elections, including any administrative requirements. 
    (f) the period available under the plan for making cash or deferred elections. 
    (g) withdrawal and vesting provisions applying to plan contributions. The notice can cross 
    reference a summary plan description for explanations of items b, c, and d. The safe harbor 
    notice must now contain items a, e, f, and g.

Employers contemplating the possibility of amending a current 401(k) plan to provide the 3% safe
harbor non-elective contribution must give a safe harbor notice. The notice given to eligible employees
before the beginning of the plan year must provide that (a) the plan may be amended during the
plan year to provide that the employer will make a safe harbor non-elective contribution of at least 3% to
the plan for the plan year, and (b) if the plan is so amended, a supplemental notice will be given to
eligible employees 30 days prior to the last day of the plan year informing them of such an