Notice 2016-16: Mid-year changes to safe harbor plans, safe harbor notices

Notice 2016-16: Mid-year changes to safe harbor plans

The IRS today released an advance version of Notice 2016-16 providing guidance on mid-year changes to a safe harbor plan under sections 401(k) and 401(m).

Related content

Notice 2016-16 [PDF 63 KB] provides that a mid-year change either to a safe harbor plan or to a plan’s safe harbor notice does not violate the safe harbor rules merely because it is a mid-year change, provided that applicable notice and election opportunity conditions are satisfied, and the mid-year change is not a prohibited mid-year change (as described in today's notice). 

Notice 2016-16 includes: (1) additional participant notice and election opportunities for some mid-year changes; (2) provisions that contributions to a section 401(k) or 401(m) retirement plan must not discriminate in favor of highly compensated employees; and (3) a request for comments on additional guidance that may be needed, in particular with respect to mid-year changes to safe harbor plans in instances when a plan sponsor is involved in a merger or acquisition.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.