Time is short for your business owner clients who wish to implement a Safe Harbor 401(k) plan for the 2015 calendar year. Many people believe that October 1 is the last day to establish a Safe Harbor 401(k) plan. And, technically, that is true. But the actual deadline is September 2.
Why September 2? Because third party administrative firms must send a 30 day notice to participants prior to implementation of the plan. And that notice has to be given to participants by no later than September 2, 2015 in order for the plan to begin on October 1, 2015. So your business owner clients who wish to implement a Safe Harbor 401(k) for 2015 must make the decision to move forward with the plan now.
The first step in implementation is to submit plan installation paperwork to the third party administrative firm so that the TPA can prepare the notice and get it out to participants by September 2. The TPA will then work with the business owner to determine the 401(k) fund platform, investment options, etc. But all of that can be done between September 2 and October 1. So remember, September 2 is the most important date for implementation of a Safe Harbor 401(k) plan in this calendar year. If that deadline is not met, the business owner will have to wait until 2016 to start the plan.
Don’t delay. Contact your TPA firm today.