Learn About the 401(k) Pension Plan Safe Harbor Provision for 2020

If your cooperative is thinking of adding the Safe Harbor provision to your NRECA-sponsored 401(k) Pension Plan, now is the ideal time to decide whether it’s right for your co-op and, if so, take action for 2020. Safe Harbor can only be added to your plan with a January 1 effective date.

First, read through the Safe Harbor Provision page on the Employee Benefits website to learn about Safe Harbor’s requirements and potential benefits. 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. Other potential benefits and additional requirements depend on your co-op’s circumstances.

Next, contact your field representative if you’re interested in discussing a 2020 implementation date. When appropriate, 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 2020, you must complete and return a Safe Harbor Adoption Agreement (provided to you by NRECA) and board resolution by October 15, 2019.

If you add the provision to your plan, in late October, you will receive a Message Center notification directing you to the required Safe Harbor notice and distribution instructions. You must give the notice to employees by November 30, 2019, for the 2020 plan year. The notice explains Safe Harbor to your employees so that they can make informed decisions about plan participation.

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.