RULES RELATING TO ELECTION OF SAFE HARBOR 401(k) STATUS.

SEC. 103. RULES RELATING TO ELECTION OF SAFE HARBOR 401(k) STATUS. (a) Limitation of Annual Safe Harbor Notice to Matching Contribution Plans.— (1) [26 U.S.C. 401] In general.—Subparagraph (A) of section 401(k)(12) of the Internal Revenue Code of 1986is amended by striking “if such arrangement” and all that follows and inserting“if such arrangement— “(i) meets the contribution requirements of subparagraph (B) and the notice requirements of subparagraph (D), or “(ii) meets the contribution requirements of subparagraph (C).” . (2) Automatic contribution arrangements.—Subparagraph (B) of section 401(k)(13) of such Code is amended by striking “means” and all that follows and inserting“means a cash or deferred arrangement— “(i) which is described in subparagraph (D)(i)(I) and meets the applicable requirements of subparagraphs (C) through (E), or “(ii) which is described in subparagraph (D)(i)(II) and meets the applicable requirements of subparagraphs (C) and (D).” . (b) Nonelective Contributions.—Section 401(k)(12) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E) the following new subparagraph: “(F) Timing of plan amendment for employer making nonelective contributions.— “(i) In general.—Except as provided in clause (ii), a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph (C) shall apply to the arrangement for the plan year, but only if the amendment is adopted— “(I) at any time before the 30th day before the close of the plan year, or “(II) at any time before the last day under paragraph (8)(A) for distributing excess contributions for the plan year. “(ii) Exception where plan provided for matching contributions.—Clause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (B) or paragraph (13)(D)(i)(I) applied to the plan year. “(iii) 4-percent contribution requirement.—Clause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subparagraph (C) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.” . (c) [26 U.S.C. 401] Automatic Contribution Arrangements.—Section 401(k)(13) of the Internal Revenue Code of 1986is amended by adding at the end the following: “(F) Timing of plan amendment for employer making nonelective contributions.— “(i) In general.—Except as provided in clause (ii), a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph (D)(i)(II) shall apply to the arrangement for the plan year, but only if the amendment is adopted— “(I) at any time before the 30th day before the close of the plan year, or “(II) at any time before the last day under paragraph (8)(A) for distributing excess contributions for the plan year. “(ii) Exception where plan provided for matching contributions.—Clause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (D)(i)(I) or paragraph (12)(B) applied to the plan year. “(iii) 4-percent contribution requirement.—Clause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subparagraph (D)(i)(II) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.” . (d) [26 U.S.C. 401 note] Effective Date.—The amendments made by this section shall apply to plan years beginning after December 31, 2019.