A Safe Harbor 401(k) plan can provide valuable relief for companies looking to mitigate compliance risk while enabling employees to save more for retirement. By offering an eligible employer contribution, companies can avoid the hassle of certain yearly nondiscrimination testing and employees can get a meaningful jumpstart in their retirement savings. It’s a win-win for everybody!
Click on each topic below to learn more:
- Benefits of a Safe Harbor Plan
- Safe Harbor Plan Design
- Who's Eligible for Safe Harbor Contributions?
- Create Your Safe Harbor Plan Today!
- Making Mid Year Changes to the Plan
If you have any questions getting started with a Safe Harbor plan, you can contact Guideline support. We’re here to help!
Deadlines to Create or Modify Safe Harbor Plans
Creating new plans
A Safe Harbor plan must be active by October 1st of the plan year in which the Safe Harbor plan starts. Participants require at least 30 days notice before a Safe Harbor plan starts, so employers will need to have the plan set up and Safe Harbor notices sent out by September 1st of the plan year. Guideline recommends initiating Safe Harbor plan set up by August 15th of the plan year in order to allow ample time for meeting all deadlines.
Summary of Safe Harbor Deadlines - New Plans
August 15th: Initiate plan set up
September 1st: Send participants Safe Harbor plan notices
October 1st: Begin Safe Harbor plan
For example, if an employer would like to create a Safe Harbor plan for 2017, we recommend initiating plan set up by August 15th, 2017.
Modifying existing plans
In most cases, existing 401(k) plans cannot create or modify safe harbor provisions during the plan year, but they can establish safe harbor provisions for the upcoming year. Participants must have at least 30 days notice before the new safe harbor provisions start and the provisions must be in place by January 1st of the plan year. From that point on, provisions generally must be in effect for the entire plan year.
This means that, for existing plans, any changes to safe harbor provisions must be made and communicated to participants by December 1st of the preceding plan year, so we suggest you begin Safe Harbor plan set up by no later than November 15th. That way, once January 1st rolls around, the Safe Harbor plan can go into effect and stay in effect for the entire year.
Summary of Safe Harbor Deadlines - Existing Plans
November 15th: Initiate plan set up
December 1st: Send participants Safe Harbor plan notices
January 1st: Begin Safe Harbor plan
Overall, we recommend initiating your Safe Harbor plan set up as soon as possible to allow plenty of time to take care of the details. If you’re thinking about saving with a Safe Harbor plan and would like to discuss any questions or concerns you may have, feel free to reach out to a Guideline rep anytime at firstname.lastname@example.org.