Act Now to Add 401(k) Safe Harbor for 2023 or 2024

If your cooperative is considering the Safe Harbor provision for your 401(k) Pension Plan in 2023 or 2024, contact NRECA now.

Safe Harbor is attractive to certain co-ops because with the provision in place, your co-op’s 401(k) Plan is deemed to pass the actual deferral percentage (ADP) test. In addition, plans that meet the Safe Harbor requirement solely by means of an employer base contribution formula do not need to give employees an advance Safe Harbor notice. Other potential benefits and additional requirements depend on your co-op’s circumstances and on the Safe Harbor formula you choose to adopt.

Your co-op can still adopt Safe Harbor for the current plan year through November 2023. Or you could adopt the provision for 2024 using either a matching or base formula. NRECA will work with you to explain the benefits and requirements, choose a desired implementation date, and assess the impact of the change on your plan. If you decide to add the provision, you must complete and return a new adoption agreement (provided to you by NRECA) and board resolution.

In early October, NRECA will notify all Safe Harbor co-ops individually (via email) whether to expect a Safe Harbor notice. If required, your notice will be released online in mid-October. When you receive the notice, give it to employees no less than 30 days before the start of the 2024 plan year (December 2, 2023). Then acknowledge distribution through the Employee Benefits website. 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.