Sample Amendment for Suspending Safe Harbor Contributions Available

The amendment is available at no additional charge for both per plan and annual subscription holders of the ftwilliam.com plan document software, according to a press release. It will be generated in MS Word and may be customized to suit each plan.

Last week, the Internal Revenue Service proposed rules that would permit employers affected by substantial business hardship to decide mid-year to reduce or suspend safe harbor non-elective contributions to 401(k) and 403(b) plans (see IRS Opens Door for Safe Harbor Contribution Cuts).Previously, plans were only permitted to cease safe harbor non-elective contributions upon termination of the plan for specified situations.

“Beginning as early as January 2009, ftwilliam.com has received dozens of emails and phone calls asking how to eliminate a 3% non-elective safe harbor contribution for 2009. These inquiries have increased exponentially since then. We are extremely pleased the ftwilliam.com system-generated amendment is now available,” Sheryl Deer, ftwilliam.com’s Vice President – Consulting Services stated in the press release.