401(k) Pension Plan Safe Harbor Information and FAQs Available

At this time of year, many cooperatives consider adopting the Safe Harbor provision in their 401(k) Pension Plan. If your co-op is among them, be sure to read the Safe Harbor frequently asked questions (FAQ) document to learn about the requirements and potential benefits. Safe Harbor is attractive to certain co-ops because with the provision in place, your co-op is deemed to pass the actual deferral percentage (ADP) test. However, the provision has certain requirements and can deliver additional benefits, depending on your co-op’s circumstances.

Implementation Timeline
The Safe Harbor feature can only be implemented for a January 1 effective date. If your co-op is interested in Safe Harbor for 2017, contact your field representative as soon as possible to begin the process. The benefits compliance team will join the discussion and will work with you to analyze the impact of the change on your plan and answer your questions.

Next, you must complete and return a Safe Harbor Adoption Agreement (provided to you by NRECA) and board resolution by October 14, 2016.

You must then distribute a copy of the required Safe Harbor notice to your employees by November 30, 2016 for the 2017 plan year. This notice describes the provision and allows 401(k) Plan participants to make informed decisions about plan participation. Benefits administrators at co-ops with the provision receive a Message Center alert in late October with a link to the notice on the Employee Benefits website and instructions for how to distribute it.

Finally, by November 30, you’ll use the Employee Benefits website to acknowledge distributing the notice.

If you have questions about the Safe Harbor provision, contact the benefits compliance team at 866.673.2299, option 7, or email us at pension.compliance@nreca.coop.