FAQs and Action Items for Co-ops Considering the 401(k) Pension Plan Safe Harbor Provision

If your cooperative has considered adding the Safe Harbor provision to your NRECA-sponsored 401(k) Pension Plan, now is the time to learn more. The Safe Harbor feature can only be implemented for a January 1 effective date. If you decide to add Safe Harbor for 2019, your documentation must be received at NRECA by October 1, 2018. That’s why now is the ideal time to decide whether it’s right for your co-op and, if so, take steps to put it in place for 2019.

Start by reading through the Safe Harbor Provision page on the Employee Benefits website. There, you’ll 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. There are other potential benefits as well as certain additional requirements, all of which  depend on your co-op’s circumstances.

Implementation timeline
If you’d like to explore Safe Harbor for 2019, contact your field representative now. 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. If you decide to add the provision for 2019, you must complete and return a Safe Harbor Adoption Agreement (provided to you by NRECA) and board resolution by October 1, 2018. Next, you must distribute a copy of the required Safe Harbor notice to your employees by November 30, 2018, for the 2019 plan year. This notice describes the provision to 401(k) Plan participants, helping them make an informed decision about plan participation. In late October, co-ops with the provision will receive a Message Center notification with a link to the notice and instructions for how to distribute it. Finally, by November 30, you’ll acknowledge distributing the notice 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.