Act Now to Add the 401(k) Safe Harbor Provision

If your cooperative is considering the Safe Harbor provision for your 401(k) Pension Plan in 2026, contact your field representative this month. With the provision in place, your co-op’s 401(k) Plan is deemed to pass the actual deferral percentage (ADP) test. Also, 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.

Your co-op can still adopt Safe Harbor for 2025 through November. Alternatively, you can adopt the provision for 2026 using either a matching or base formula. If you decide to add the provision, you must complete and return a new adoption agreement (provided to you by NRECA) and board resolution. 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.

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 fewer than 30 days before the start of the 2026 plan year (December 2, 2025). 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.