In announcement 2007-59 , the IRS said “a plan will not fail to satisfy the requirements to be a Â§ 401(k) safe harbor plan merely because of mid-year changes to implement a qualified Roth contribution program (as defined in Â§ 402A) or the hardship withdrawals described in part III of Notice 2007-7.”
The IRS said the announcement was issued to address employer concerns about adding provisions during a plan year to their Â§ 401(k) safe harbor plans in order to take advantage of recently effective changes to these rules under the Pension Protection Act of 2006 (PPA) when the pre-year safe harbor notice required from sponsors does not include information about the added provisions.
The PPA made the ability to implement a qualified Roth 401(k) contribution permanent and expanded hardship rules to allow for the distributions to cover qualified expenses for a primary beneficiary of a participant’s account – which may not be a spouse or dependent.
In the announcement the IRS also requested comments regarding whether additional guidance is needed with respect to mid-year changes to a Â§ 401(k) safe harbor plans for the Income Tax Regulations (relating to mid-year amendments to become a safe harbor plan using non-elective contributions) and Â§ 1.401(k)-3(g) (relating to mid-year amendments to suspend or reduce safe harbor matching contributions). Written comments should be submitted by September 17, 2007 to
CC:PA:LPD:DRU (Announcement 2007-59), Room 5203, Internal Revenue Service, POB 7604 Ben Franklin Station, Washington, D.C. 20044.
Comments may be submitted via the Internet at firstname.lastname@example.org with the subject line: Announcement 2007-59.
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