23134 Federal Register / Vol. 74, No. 94 / Monday, May 18, 2009 / Proposed Rules 

III. Current Port Limits of Columbus, 

Ohio 

The current port limits of Columbus, 

Ohio, are contained in two separate 

Treasury Decisions: 82–9 and 96–67. 

Treasury Decision (T.D.) 82–9, 

published in the Federal Register (47 

FR 1286) on January 12, 1982, specified 

the limits as follows: 

The geographical boundaries of the 

Columbus, Ohio, Customs port of entry 

include all of the territory within the 

corporate limits of Columbus, Ohio; all of the 

territory completely surrounded by the city 

of Columbus; and, all of the territory 

enclosed by Interstate Highway 270 (outer 

belt), which completely surrounds the city. 

T.D. 96–67, published in the Federal 

Register (61 FR 49058) on September 

18, 1996, expanded the port limits of 

Columbus, Ohio, to encompass the port 

limits set forth in T.D. 82–9 as well as 

the following territory: 

Beginning at the intersection of Rohr and 

Lockbourne Roads, then proceeding 

southerly along Lockbourne Road to 

Commerce Street, thence easterly along 

Commerce Street to its intersection with the 

N & W railroad tracks, then southerly along 

the N & W railroad tracks to the FranklinPickaway County line, thence easterly along 

the Franklin-Pickaway County line to its 

intersection with Pontius Road, then 

northerly along Pontius Road to its 

intersection with Rohr Road, thence westerly 

along Rohr Road to its intersection with 

Lockbourne Road, the point of beginning, all 

within the County of Franklin, State of Ohio. 

IV. Proposed Port Limits of Columbus, 

Ohio 

The new port limits of Columbus, 

Ohio, are proposed as follows: 

The geographic boundaries of the 

Columbus, Ohio, port of entry include all of 

Franklin County, and that part of Pickaway 

County east of U.S. Route 23 and north of 

State Route 752, all in the State of Ohio. 

V. Proposed Amendment to the 

Regulations 

If the proposed port limits are 

adopted, CBP will amend the list of CBP 

ports of entry at 19 CFR 101.3(b)(1), to 

reflect the new description of the limits 

of the Columbus, Ohio, port of entry. 

V. Authority 

This change is proposed under the 

authority of 5 U.S.C. 301 and 19 U.S.C. 

2, 66 and 1624, and the Homeland 

Security Act of 2002, Public Law 107– 

296 (November 25, 2002). 

VI. Signing Authority 

The signing authority for this 

document falls under 19 CFR 0.2(a) 

because this port extension is not within 

the bounds of those regulations for 

which the Secretary of the Treasury has 

retained sole authority. Accordingly, the 

notice of proposed rulemaking may be 

signed by the Secretary of Homeland 

Security (or his or her delegate). 

VII. Statutory and Regulatory Reviews. 

A. Executive Order 12866: Regulatory 

Planning and Review 

This proposed rule is not considered 

to be an economically significant 

regulatory action under Executive Order 

12866 because it will not result in the 

expenditure of over $100 million in any 

one year. The proposed change is 

intended to expand the geographical 

boundaries of the Port of Columbus, 

Ohio, and make it more easily 

identifiable to the public. There are no 

new costs to the public associated with 

this rule. Accordingly, this proposed 

rule has not been reviewed by the Office 

of Management and Budget (OMB) 

under Executive Order 12866. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires federal 

agencies to examine the impact a rule 

would have on small entities. A small 

entity may be a small business (defined 

as any independently owned and 

operated business not dominant in its 

field that qualifies as a small business 

per the Small Business Act), a small notfor-profit organization, or a small 

governmental jurisdiction (locality with 

fewer than 50,000 people). 

This proposed rule does not directly 

regulate small entities. The proposed 

change is part of CBP’s continuing 

program to more efficiently utilize its 

personnel, facilities, and resources, and 

to provide better service to carriers, 

importers, and the general public. To 

the extent that all entities are able to 

more efficiently or conveniently access 

the facilities and resources within the 

proposed expanded geographical area of 

the new port limits, this proposed rule, 

if finalized, should confer benefits to 

CBP, carriers, importers, and the general 

public. 

Because this rule does not directly 

regulate small entities, we do not 

believe that this rule has a significant 

economic impact on a substantial 

number of small entities. However, we 

welcome comments on that assumption. 

The most helpful comments are those 

that can give us specific information or 

examples of a direct impact on small 

entities. If we do not receive comments 

that demonstrate that the rule causes 

small entities to incur direct costs, we 

may certify that this action does not 

have a significant economic impact on 

a substantial number of small entities 

during the final rule. 

Dated: May 12, 2009. 

Janet Napolitano, 

Secretary. 

[FR Doc. E9–11551 Filed 5–15–09; 8:45 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–115699–09] 

RIN:1545–BI64 

Suspension or Reduction of Safe 

Harbor Nonelective Contributions 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document contains 

proposed amendments to the 

regulations relating to certain cash or 

deferred arrangements and matching 

contributions under section 401(k) plans 

and section 403(b) plans. These 

regulations affect administrators of, 

employers maintaining, participants in, 

and beneficiaries of certain section 

401(k) plans and section 403(b) plans. 

DATES: Written or electronic comments 

must be received by August 17, 2009. 

Outlines of the topics to be discussed at 

the public hearing scheduled for 

Wednesday, September 23, 2009, at 10 

a.m. must be received by August 19, 

2009. 

ADDRESSES: Send submissions to 

CC:PA:LPD:PR (REG–115699–09), Room 

5203, Internal Revenue Service, PO Box 

7604, Ben Franklin Station, Washington, 

DC 20044. Submissions may be handdelivered Monday through Friday 

between the hours of 8 a.m. and 4 p.m. 

to CC:PA:LPD:PR (REG–115699–09), 

Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC 20224 or sent 

electronically via the Federal 

eRulemaking Portal at http:// 

www.regulations.gov (IRS REG–115699– 

09). 

FOR FURTHER INFORMATION CONTACT: 

Concerning the regulations, R. Lisa 

Mojiri-Azad, Dana Barry or William D. 

Gibbs at (202) 622–6060; concerning the 

submission of comments or to request a 

public hearing, 

Richard.A.Hurst@irscounsel.treas.gov, 

(202) 622–7180 (not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 


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Federal Register / Vol. 74, No. 94 / Monday, May 18, 2009 / Proposed Rules 23135 

Paperwork Reduction Act 

The collection of information 

contained in this notice of proposed 

rulemaking has been submitted to the 

Office of Management and Budget for 

review in accordance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(d)). Comments on the 

collection of information should be sent 

to the Office of Management and 

Budget, Attn: Desk Officer for the 

Department of the Treasury, Office of 

Information and Regulatory Affairs, 

Washington, DC 20503, with copies to 

the Internal Revenue Service, Attn: IRS 

Reports Clearance Officer, 

SE:W:CAR:MP:T:T:SP; Washington, DC 

20224. Comments on the collection of 

information should be received by July 

17, 2009. Comments are specifically 

requested concerning: 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Internal Revenue Service, including 

whether the information will have 

practical utility; 

The accuracy of the estimated burden 

associated with the proposed collection 

of information; 

How the quality, utility, and clarity of 

the information to be collected may be 

enhanced; 

How the burden of complying with 

the proposed collections of information 

may be minimized, including through 

the application of automated collection 

techniques or other forms of information 

technology; and 

Estimates of capital or start-up costs 

and costs of operation, maintenance, 

and purchase of service to provide 

information. 

The collection of information in these 

proposed regulations is in § 1.401(k)–3. 

The collection relates to the new 

supplemental notice in the case of a 

reduction or suspension of safe harbor 

nonelective contributions. The likely 

recordkeepers are businesses or other 

for-profit institutions, nonprofit 

institutions, organizations, and state or 

local governments. 

Estimated total average annual 

recordkeeping burden: 5,000 hours. 

Estimated average annual burden 

hours per recordkeeper: 1 hour. 

Estimated number of recordkeepers: 

5,000. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the Office of 

Management and Budget. 

Books or records relating to a 

collection of information must be 

retained as long as their contents may 

become material in the administration 

of any internal revenue law. Generally, 

tax returns and tax return information 

are confidential, as required by 26 

U.S.C. 6103. 

Background 

This document contains proposed 

amendments to regulations under 

sections 401(k) and 401(m) of the 

Internal Revenue Code. 

Section 401(k)(1) provides that a 

profit-sharing, stock bonus, pre-ERISA 

money purchase, or rural cooperative 

plan will not fail to qualify under 

section 401(a) merely because it 

contains a qualified cash or deferred 

arrangement. Section 1.401(k)–1(a)(2) 

defines a cash or deferred arrangement 

(CODA) as an arrangement under which 

an eligible employee may make a cash 

or deferred election with respect to 

contributions to, or accruals or other 

benefits under, a plan that is intended 

to satisfy the requirements of section 

401(a). Contributions that are made 

pursuant to a cash or deferred election 

under a qualified CODA are commonly 

referred to as elective contributions. 

In order for a CODA to be a qualified 

CODA, it must satisfy a number of 

requirements. For example, 

contributions under the CODA must 

satisfy either the nondiscrimination test 

set forth in section 401(k)(3), called the 

actual deferral percentage (ADP) test, or 

one of the design-based alternatives in 

section 401(k)(11), 401(k)(12), or 

401(k)(13). Under the ADP test, the 

average percentage of compensation 

deferred for eligible highly compensated 

employees (HCEs) is compared to the 

average percentage of compensation 

deferred for eligible nonhighly 

compensated employees (NHCEs), and if 

certain deferral percentage limits are 

exceeded with respect to HCEs, 

corrective action must be taken. 

Section 401(k)(12) provides a designbased safe harbor method under which 

a CODA is treated as satisfying the ADP 

test if the arrangement meets certain 

contribution and notice requirements. A 

plan satisfies this safe harbor method if 

the employer makes specified qualified 

matching contributions (QMACs) for all 

eligible NHCEs. The employer can make 

QMACs under a basic matching formula 

that provides for QMACs on behalf of 

each eligible NHCE equal to 100% of the 

employee’s elective contributions that 

do not exceed 3% of compensation and 

50% of the employee’s elective 

contributions that exceed 3% but do not 

exceed 5% of compensation. 

Alternatively, the employer can make 

QMACs under an enhanced matching 

formula that provides, at each rate of 

elective contributions, for an aggregate 

amount of QMACs that is at least as 

generous as under the basic matching 

formula, but only if the rate of QMACs 

under the enhanced matching formula 

does not increase as the employee’s rate 

of elective contributions increases. In 

lieu of QMACs, the plan is permitted to 

provide qualified nonelective 

contributions (QNECs) equal to 3% of 

compensation for all eligible NHCEs. In 

addition, notice must be provided to 

each eligible employee, within a 

reasonable period before the beginning 

of the plan year, of the employee’s rights 

and obligations under the plan. 

Section 401(k)(13), as added by 

section 902 of the Pension Protection 

Act of 2006, Public Law 109–280 (PPA 

’06), provides an alternative designbased safe harbor for a CODA that 

provides for automatic contributions at 

a specified level and meets certain 

employer contribution and notice 

requirements. Similar to the designbased safe harbor under section 

401(k)(12), section 401(k)(13) provides a 

choice for an employer between 

satisfying a matching contribution 

requirement or a nonelective 

contribution requirement. Under the 

matching contribution requirement, the 

employer can make matching 

contributions under a basic matching 

formula that provides for matching 

contributions on behalf of each eligible 

NHCE equal to 100% of the employee’s 

elective contributions that do not 

exceed 1% of compensation and 50% of 

the employee’s elective contributions 

that exceed 1% but do not exceed 6% 

of compensation. Alternatively, the 

employer can make matching 

contributions under an enhanced 

matching formula that provides, at each 

rate of elective contributions, for an 

aggregate amount of matching 

contributions that is at least as generous 

as under the basic matching formula at 

such rate, but only if the rate of 

matching contributions under the 

enhanced matching formula does not 

increase as the employee’s rate of 

elective contributions increases. In 

addition, the plan must satisfy a notice 

requirement under section 401(k)(13) 

that is similar to the notice requirement 

under section 401(k)(12). 

Except as discussed elsewhere in this 

preamble, a plan that uses one of these 

safe harbor methods under section 

401(k)(12) or (13) must specify, before 

the beginning of the plan year, whether 

the safe harbor contribution will be the 

safe harbor nonelective contribution or 

the safe harbor matching contribution 

and is not permitted to provide that 

ADP testing will be used if the 

requirements for the safe harbor are not 

satisfied. 


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23136 Federal Register / Vol. 74, No. 94 / Monday, May 18, 2009 / Proposed Rules 

1The definition of substantial business hardship 

in section 412(d) was relocated to become part of 

section 412(c) by section 111 of the Pension 

Protection Act of 2006, Public Law 109–280. 

Section 401(m) sets forth a 

nondiscrimination requirement that 

applies to a plan providing for matching 

contributions or employee 

contributions. Such a plan must satisfy 

either the nondiscrimination test set 

forth in section 401(m)(2), called the 

actual contribution percentage (ACP) 

test, or one of the design-based 

alternatives in section 401(m)(10), 

401(m)(11), or 401(m)(12). The ACP test 

in section 401(m)(2) is comparable to 

the ADP test in section 401(k)(3). 

Under section 401(m)(11), a defined 

contribution plan is treated as satisfying 

the ACP test with respect to matching 

contributions if the plan satisfies the 

ADP safe harbor of section 401(k)(12) 

and certain other requirements are 

satisfied. Similarly, under section 

401(m)(12), as added by section 902 of 

PPA ’06, a defined contribution plan 

that provides for automatic 

contributions at a specified level is 

treated as meeting the ACP test with 

respect to matching contributions if the 

plan satisfies the ADP safe harbor of 

section 401(k)(13) and certain other 

requirements are satisfied. 

Section 403(b) provides favorable tax 

treatment for the purchase of annuity 

contracts that satisfy certain 

requirements. Pursuant to sections 

403(b)(1)(D) and 403(b)(12)(A)(i), the 

purchase of an annuity contract (other 

than a purchase by a church) is eligible 

for this favorable tax treatment only if 

it is part of a plan that meets the 

requirements of section 401(m), as if it 

were a qualified plan under section 

401(a). 

Final regulations under sections 

401(k) and 401(m) were published on 

December 29, 2004. Sections 1.401(k)–3 

and 1.401(m)–3 set forth the 

requirements for a safe harbor plan 

under sections 401(k)(12) and 

401(m)(11), respectively. On February 

24, 2009, these regulations were 

amended to reflect sections 401(k)(13) 

and 401(m)(12) (74 FR 8200). 

Sections 1.401(k)–3(e)(1) and 

1.401(m)–3(f)(1) provide that subject to 

certain exceptions, a safe harbor plan 

must be adopted before the beginning of 

the plan year and be maintained 

throughout a full 12-month plan year. 

Accordingly, if, at the beginning of the 

plan year, a plan contains an allocation 

formula that includes safe harbor 

matching or safe harbor nonelective 

contributions, then the plan may not be 

amended to revert to ADP or ACP 

testing for the plan year (except to the 

extent permitted under §§ 1.401(k)–3 

and 1.401(m)–3). 

Sections 1.401(k)–3(f) and 1.401(m)– 

3(g) permit a plan that provides for the 

use of the current year ADP or ACP 

testing method to be amended after the 

first day of the plan year to adopt the 

safe harbor method under § 1.401(k)–3 

or § 1.401(m)–3 using safe harbor 

nonelective contributions, effective as of 

the first day of the plan year, if certain 

requirements are satisfied. In particular, 

the amendment must be adopted no 

later than 30 days before the last day of 

the plan year, and the plan must satisfy 

specified contingent and follow-up 

notice requirements. Under §§ 1.401(k)– 

3(f) and 1.401(m)–3(g), a plan satisfies 

the contingent notice requirement if the 

notice is provided before the plan year 

and specifies that the plan may be 

amended during the plan year to 

include the safe harbor nonelective 

contribution and that, if the plan is 

amended, a follow-up notice will be 

provided. A plan satisfies the follow-up 

notice requirement if, no later than 30 

days before the last day of the plan year, 

each eligible employee is given a notice 

that states that the safe harbor 

nonelective contributions will be made 

for the plan year. 

A plan that provides for safe harbor 

matching contributions will not fail to 

satisfy section 401(k)(3) or section 

401(m)(2) for a plan year merely because 

the plan is amended during the plan 

year to reduce or suspend safe harbor 

matching contributions on future 

elective contributions, as long as the 

requirements under § 1.401(k)–3(g) or 

§ 1.401(m)–3(h) are met. Under these 

regulations: a notice must be provided 

to all eligible employees regarding the 

reduction or suspension of safe harbor 

matching contributions; the reduction or 

suspension of safe harbor matching 

contributions must be effective no 

earlier than the later of 30 days after 

eligible employees are provided the 

notice and the date the amendment is 

adopted; eligible employees must be 

given a reasonable opportunity prior to 

the reduction or suspension of safe 

harbor matching contributions to change 

their cash or deferred elections and, if 

applicable, their employee contribution 

elections; the plan must be amended to 

provide that the applicable 

nondiscrimination tests will be satisfied 

for the entire plan year; and the plan 

must satisfy the requirements of 

§§ 1.401(k)–3 and 1.401(m)–3 (other 

than §§ 1.401(k)–3(g) and 1.401(m)–3(h)) 

with respect to amounts deferred 

through the effective date of the 

amendment. 

Sections 1.401(k)–3(e)(4) and 

1.401(m)–3(f)(4) provide that, if a plan 

terminates during a plan year, the plan 

will not fail to satisfy the requirements 

of §§ 1.401(k)–3(e)(1) and 1.401(m)– 

3(f)(1) merely because the final plan 

year is less than 12 months, provided 

that the plan satisfies the requirements 

of §§ 1.401(k)–3 and 1.401(m)–3 through 

the date of termination and either (1) the 

plan would have satisfied the 

requirements applicable to a plan 

amendment to reduce or suspend safe 

harbor matching contributions (other 

than the requirement that employees 

have a reasonable opportunity to change 

their cash or deferred elections and, if 

applicable, employee contribution 

elections) or (2) the termination is in 

connection with a transaction described 

in section 410(b)(6)(C) or the employer 

incurs a substantial business hardship 

(comparable to a substantial business 

hardship described in section 412(d) 1). 

Section 416 sets forth the rules for 

top-heavy plans. Section 416(g)(4)(H) 

provides that a top-heavy plan will not 

include a plan which consists solely of 

a cash or deferred arrangement that 

meets the requirements of section 

401(k)(12) or 401(k)(13) and matching 

contributions with respect to which the 

requirements of section 401(m)(11) or 

401(m)(12) are met. 

Explanation of Provisions 

The proposed regulations would 

amend §§ 1.401(k)–3 and 1.401(m)–3 to 

permit an employer sponsoring a safe 

harbor plan described in section 

401(k)(12) or 401(k)(13) that incurs a 

substantial business hardship 

(comparable to a substantial business 

hardship described in section 412(c)) to 

reduce or suspend safe harbor 

nonelective contributions during a plan 

year. These proposed regulations would 

provide an employer an alternative to 

the option of terminating the employer’s 

safe harbor plan in such a situation. 

The proposed regulations would 

allow for the reduction or suspension of 

safe harbor nonelective contributions 

under rules generally comparable to the 

provisions relating to the reduction or 

suspension of safe harbor matching 

contributions. Under these rules, a plan 

that reduces or suspends safe harbor 

nonelective contributions will not fail to 

satisfy section 401(k)(3), provided that: 

(1) All eligible employees are provided 

a supplemental notice of the reduction 

or suspension; (2) the reduction or 

suspension of safe harbor nonelective 

contributions is effective no earlier than 

the later of 30 days after eligible 

employees are provided the 

supplemental notice and the date the 

amendment is adopted; (3) eligible 

employees are given a reasonable 

opportunity (including a reasonable 


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Federal Register / Vol. 74, No. 94 / Monday, May 18, 2009 / Proposed Rules 23137 

period after receipt of the supplemental 

notice) prior to the reduction or 

suspension of the safe harbor 

nonelective contributions to change 

their cash or deferred elections and, if 

applicable, their employee contribution 

elections; (4) the plan is amended to 

provide that the ADP test will be 

satisfied for the entire plan year in 

which the reduction or suspension 

occurs, using the current year testing 

method; and (5) the plan satisfies the 

safe harbor nonelective contribution 

requirement with respect to safe harbor 

compensation paid through the effective 

date of the amendment. The proposed 

regulations would also provide that the 

supplemental notice requirement is 

satisfied if each eligible employee is 

given a notice that explains: (1) The 

consequences of the amendment 

reducing or suspending future safe 

harbor nonelective contributions; (2) the 

procedures for changing cash or 

deferred elections and, if applicable, 

employee contribution elections; and (3) 

the effective date of the amendment. 

The proposed regulations would 

further provide that these same rules 

that apply to safe harbor plans under 

§ 1.401(k)–3 also apply to safe harbor 

plans under § 1.401(m)–3, except that 

the plan must be amended to provide 

that the ACP test will be satisfied for the 

entire plan year in which the reduction 

or suspension occurs using the current 

year testing method. 

Because the reduction or suspension 

of safe harbor contributions can be 

effective no earlier than the later of 30 

days after the notice is provided to all 

eligible employees and the date the 

amendment is adopted, an employer 

that wants to reduce or suspend safe 

harbor contributions during a year could 

not implement this change by adopting 

the amendment at the end of the plan 

year. In addition, a plan that is amended 

during the plan year to reduce or 

suspend safe harbor contributions 

(whether nonelective contributions or 

matching contributions) must prorate 

the otherwise applicable compensation 

limit under section 401(a)(17) in 

accordance with the requirements of 

§ 1.401(a)(17)–1(b)(3)(iii)(A). 

Furthermore, a plan that is amended to 

reduce or suspend safe harbor 

contributions is no longer a plan 

described in section 401(k)(12), 

401(k)(13), 401(m)(11), or 401(m)(12) for 

the entire plan year. Accordingly, such 

a plan is not described in section 

416(g)(4)(H) and, thus, will be subject to 

the top-heavy rules under section 416. 

Proposed Effective Date 

These regulations are proposed to be 

effective for amendments adopted after 

May 18, 2009. Taxpayers may rely on 

these proposed regulations for guidance 

pending the issuance of final 

regulations. If, and to the extent, the 

final regulations are more restrictive 

than the guidance in these proposed 

regulations, those provisions of the final 

regulations will be applied without 

retroactive effect. 

Special Analyses 

It has been determined that this notice 

of proposed rulemaking is not a 

significant regulatory action as defined 

in Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

has been determined that 5 U.S.C. 

533(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to these regulations. It is hereby 

certified that the collection of 

information in these proposed 

regulations will not have a significant 

economic impact on a substantial 

number of small entities. The proposed 

regulations impact on small businesses 

is as follows. A pension consultant or 

attorney must read the regulation. He 

must then communicate this 

information to the small business 

owner. The small business owner must 

then decide if he wants to reduce 

nonelective contributions to its safe 

harbor plan. Once this decision is made, 

the pension consultant or attorney must 

draft the notice to employees and the 

small business must make sure that the 

employees receive the notice. 

We estimate that the cost to do these 

tasks is $500–$1000. If the small 

business owner can implement this 

program by July 1, 2009, he will save 

1.5% of his payroll for 2009. A small 

business with an annual payroll of 

$1,000,000 can save $15,000 in 2009. 

Thus, adopting the provisions in these 

regulation will in almost all cases save 

the small business owner money. 

Therefore, an analysis under the 

Regulatory Flexibility Act (5 U.S.C. 

chapter 6) is not required. 

Pursuant to section 7805(f) of the 

Internal Revenue Code, these 

regulations have been submitted to the 

Chief Counsel for Advocacy of the Small 

Business Administration for comments 

on its impact on small business. 

Comments and Requests for Public 

Hearing 

Before these proposed regulations are 

adopted as final regulations, 

consideration will be given to any 

written (one signed and eight (8) copies) 

or electronic comments that are 

submitted timely to the IRS. The IRS 

and Treasury Department specifically 

request comments on the clarity of the 

proposed rules and how they can be 

made easier to understand. 

The current regulations, in describing 

the requirement for safe harbor plans 

that a notice be provided before the 

beginning of the plan year, do not 

address the possibility that safe harbor 

contributions may be reduced or 

suspended during the year. Since, under 

these regulations, safe harbor 

nonelective contributions, as well as 

safe harbor matching contributions, can 

be reduced or suspended during the 

plan year under certain circumstances, 

the IRS and Treasury are considering 

adding to the minimum content listing 

in § 1.401(k)–3(d)(2)(ii), a requirement 

that the possibility of reduced or 

suspended safe harbor contributions be 

described in the notice required to be 

provided before the beginning of the 

plan year (except in the case of a 

contingent notice described in 

§ 1.401(k)–3(f)). If adopted, the 

requirement that the notice describe the 

possibility of reduced or suspended safe 

harbor contributions would not apply 

for plan years beginning before January 

1, 2010. The IRS and Treasury 

specifically request comments on 

whether the additional content 

requirement should be added to the 

regulations. 

A public hearing has been scheduled 

for September 23, 2009, at 10 a.m. in the 

IRS Auditorium, Internal Revenue 

Building, 1111 Constitution Avenue, 

NW., Washington, DC. Due to building 

security procedures, visitors must enter 

at the Constitution Avenue entrance. In 

addition, all visitors must present photo 

identification to enter the building. 

Because of access restrictions, visitors 

will not be admitted beyond the 

immediate entrance area more than 30 

minutes before the hearing starts. For 

information about having your name 

placed on the building access list to 

attend the hearing, see the FOR FURTHER

INFORMATION CONTACT section of this 

preamble. 

Persons who wish to present oral 

comments at the hearing must submit 

written or electronic comments and 

submit an outline of the topics to be 

discussed and the amount of time to be 

devoted to each topic (a signed original 

and eight (8) copies) by August 19, 

2009. A period of 10 minutes will be 

allotted to each person for making 

comments. 

An agenda showing the scheduling of 

the speakers will be prepared after the 

deadline for receiving outlines has 

passed. Copies of the agenda will be 

available free of charge at the hearing. 


cprice-sewell on PRODPC61 with PROPOSALS
23138 Federal Register / Vol. 74, No. 94 / Monday, May 18, 2009 / Proposed Rules 

Drafting Information 

The principal authors of these 

regulations are Dana Barry, William 

Gibbs, and Lisa Mojiri-Azad, Office of 

Division Counsel/Associate Chief 

Counsel (Tax Exempt and Government 

Entities). However, other personnel 

from the IRS and Treasury Department 

participated in the development of these 

regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

proposed to be amended as follows: 

PART 1—INCOME TAXES 

Paragraph 1. The authority citation 

for part 1 is amended to read as follows: 

Authority: 26 U.S.C. 7805 * * * 

Section 1.401(k)–3 is also issued under 26 

U.S.C. 401(m)(9). 

Par. 2. Section 1.401(k)–0 is amended 

by revising the entries for § 1.401(k)– 

3(g), (g)(1) and (g)(2) to read as follows: 

§ 1.401(k)–0 Table of Contents. 

* * * * * 

§ 1.401(k)–3 Safe harbor requirements. 

* * * * * 

(g) Permissible reduction or suspension of 

safe harbor contributions. 

(1) General rule. 

(i) Matching contributions. 

(ii) Nonelective contributions. 

(2) Supplemental notice. 

* * * * * 

Par. 3. Section 1.401(k)–3 is amended 

by: 

1. Revising paragraph (e)(4)(ii). 

2. Revising paragraph (g). 

The revisions read as follows: 

§ 1.401(k)–3 Safe harbor requirements. 

* * * * * 

(e) * * * 

(4) * * * 

(ii) The plan termination is in 

connection with a transaction described 

in section 410(b)(6)(C) or the employer 

incurs a substantial business hardship 

comparable to a substantial business 

hardship described in section 412(c). 

* * * * * 

(g) Permissible reduction or 

suspension of safe harbor 

contributions—(1) General rule—(i) 

Matching contributions. A plan that 

provides for safe harbor matching 

contributions intended to satisfy the 

requirements of paragraph (c) of this 

section for a plan year will not fail to 

satisfy the requirements of section 

401(k)(3) merely because the plan is 

amended during the plan year to reduce 

or suspend safe harbor matching 

contributions on future elective 

contributions (and, if applicable, 

employee contributions) provided 

that— 

(A) All eligible employees are 

provided the supplemental notice in 

accordance with paragraph (g)(2) of this 

section; 

(B) The reduction or suspension of 

safe harbor matching contributions is 

effective no earlier than the later of 30 

days after eligible employees are 

provided the supplemental notice 

described in paragraph (g)(2) of this 

section and the date the amendment is 

adopted; 

(C) Eligible employees are given a 

reasonable opportunity (including a 

reasonable period after receipt of the 

supplemental notice) prior to the 

reduction or suspension of safe harbor 

matching contributions to change their 

cash or deferred elections and, if 

applicable, their employee contribution 

elections; 

(D) The plan is amended to provide 

that the ADP test will be satisfied for the 

entire plan year in which the reduction 

or suspension occurs using the current 

year testing method described in 

§ 1.401(k)–2(a)(2)(ii); and 

(E) The plan satisfies the requirements 

of this section (other than this paragraph 

(g)) with respect to amounts deferred 

through the effective date of the 

amendment. 

(ii) Nonelective contributions. A plan 

that provides for safe harbor nonelective 

contributions intended to satisfy the 

requirements of paragraph (b) of this 

section for the plan year will not fail to 

satisfy the requirements of section 

401(k)(3) merely because the plan is 

amended during the plan year to reduce 

or suspend safe harbor nonelective 

contributions provided that— 

(A) The employer incurs a substantial 

business hardship (comparable to a 

substantial business hardship described 

in section 412(c)); 

(B) The amendment is adopted after 

May 18, 2009; 

(C) All eligible employees are 

provided the supplemental notice in 

accordance with paragraph (g)(2) of this 

section; 

(D) The reduction or suspension of 

safe harbor nonelective contributions is 

effective no earlier than the later of 30 

days after eligible employees are 

provided the supplemental notice 

described in paragraph (g)(2) of this 

section and the date the amendment is 

adopted; 

(E) Eligible employees are given a 

reasonable opportunity (including a 

reasonable period after receipt of the 

supplemental notice) prior to the 

reduction or suspension of nonelective 

contributions to change their cash or 

deferred elections and, if applicable, 

their employee contribution elections; 

(F) The plan is amended to provide 

that the ADP test will be satisfied for the 

entire plan year in which the reduction 

or suspension occurs using the current 

year testing method described in 

§ 1.401(k)–2(a)(2)(ii); and 

(G) The plan satisfies the 

requirements of this section (other than 

this paragraph (g)) with respect to safe 

harbor compensation paid through the 

effective date of the amendment. 

(2) Supplemental notice. The 

supplemental notice requirement of this 

paragraph (g)(2) is satisfied if each 

eligible employee is given a notice (in 

writing or such other form as prescribed 

by the Commissioner) that explains— 

(i) The consequences of the 

amendment which reduces or suspends 

future safe harbor contributions; 

(ii) The procedures for changing their 

cash or deferred elections and, if 

applicable, their employee contribution 

elections; and 

(iii) The effective date of the 

amendment. 

Par. 4. Section 1.401(m)–0 is 

amended by revising the entries for 

§ 1.401(m)–3(h), (h)(1) and (h)(2) in their 

entirety to read as follows: 

§ 1.401(m)–0 Table of Contents. 

* * * * * 

§ 1.401(m)–3 Safe Harbor Requirements. 

* * * * * 

(h) Permissible reduction or suspension of 

safe harbor contributions. 

(1) General rule. 

(i) Matching contributions. 

(ii) Nonelective contributions. 

(2) Supplemental notice. 

* * * * * 

Par. 5. Section 1.401(m)–3 is 

amended by: 

1. Revising paragraph (f)(4)(ii). 

2. Revising paragraph (h). 

The revisions read as follows: 

§ 1.401(m)–3 Safe harbor requirements. 

* * * * * 

(f) * * * 

(4) * * * 

(ii) The plan termination is in 

connection with a transaction described 

in section 410(b)(6)(C) or the employer 

incurs a substantial business hardship, 

comparable to a substantial business 

hardship described in section 412(c). 

* * * * * 

(h) Permissible reduction or 

suspension of safe harbor 

contributions—(1) General rule—(i) 

Matching contributions. A plan that 

provides for safe harbor matching 


cprice-sewell on PRODPC61 with PROPOSALS
Federal Register / Vol. 74, No. 94 / Monday, May 18, 2009 / Proposed Rules 23139 

contributions intended to satisfy the 

requirements of paragraph (c) of this 

section for a plan year will not fail to 

satisfy the requirements of section 

401(m)(2) merely because the plan is 

amended during the plan year to reduce 

or suspend safe harbor matching 

contributions on future elective 

deferrals and, if applicable, employee 

contributions provided that— 

(A) All eligible employees are 

provided the supplemental notice in 

accordance with paragraph (h)(2) of this 

section; 

(B) The reduction or suspension of 

safe harbor matching contributions is 

effective no earlier than the later of 30 

days after eligible employees are 

provided the supplemental notice 

described in paragraph (h)(2) of this 

section and the date the amendment is 

adopted; 

(C) Eligible employees are given a 

reasonable opportunity (including a 

reasonable period after receipt of the 

supplemental notice) prior to the 

reduction or suspension of safe harbor 

matching contributions to change their 

cash or deferred elections and, if 

applicable, their employee contribution 

elections; 

(D) The plan is amended to provide 

that the ACP test will be satisfied for the 

entire plan year in which the reduction 

or suspension occurs using the current 

year testing method described in 

§ 1.401(m)–2(a)(2)(ii); and 

(E) The plan satisfies the requirements 

of this section (other than this paragraph 

(h)) with respect to amounts deferred 

through the effective date of the 

amendment. 

(ii) Nonelective contributions. A plan 

that provides for safe harbor nonelective 

contributions intended to satisfy the 

requirements of paragraph (b) of this 

section will not fail to satisfy the 

requirements of section 401(m)(2) for 

the plan year merely because the plan 

is amended during the plan year to 

reduce or suspend safe harbor 

nonelective contributions provided 

that— 

(A) The employer incurs a substantial 

business hardship (comparable to a 

substantial business hardship described 

in section 412(c)); 

(B) The amendment is adopted after 

May 18, 2009; 

(C) All eligible employees are 

provided the supplemental notice in 

accordance with paragraph (h)(2) of this 

section; 

(D) The reduction or suspension of 

safe harbor nonelective contributions is 

effective no earlier than the later of 30 

days after eligible employees are 

provided the supplemental notice 

described in paragraph (h)(2) of this 

section and the date the amendment is 

adopted; 

(E) Eligible employees are given a 

reasonable opportunity (including a 

reasonable period after receipt of the 

supplemental notice) prior to the 

reduction or suspension of nonelective 

contributions to change their cash or 

deferred elections and, if applicable, 

their employee contribution elections; 

(F) The plan is amended to provide 

that the ACP test will be satisfied for the 

entire plan year in which the reduction 

or suspension occurs using the current 

year testing method described in 

§ 1.401(m)–2(a)(2)(ii); and 

(G) The plan satisfies the 

requirements of this section (other than 

this paragraph (h)) with respect to safe 

harbor compensation paid through the 

effective date of the amendment. 

(2) Supplemental notice. The 

supplemental notice requirement of this 

paragraph (h)(2) is satisfied if each 

eligible employee is given a notice that 

satisfies the requirements of § 1.401(k)– 

3(g)(2). 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. E9–11481 Filed 5–15–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2008–1017] 

RIN 1625–AA11 

Regulated Navigation Areas; Bars 

Along the Coasts of Oregon and 

Washington 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of third public meeting; 

request for comments. 

SUMMARY: In response to requests 

received, the Coast Guard announces a 

third public meeting, to be held on June 

2, 2009, to receive comments on the 

notice of proposed rulemaking entitled 

‘‘Regulated Navigation Areas; Bars 

Along the Coasts of Oregon and 

Washington’’ that was published in the 

Federal Register on February 12, 2009 

(74 FR 7022). 

As stated in the notice of proposed 

rulemaking, the Coast Guard proposes to 

establish Regulated Navigation Areas 

(RNA) covering specific bars along the 

coasts of Oregon and Washington that 

will include procedures for restricting 

and/or closing those bars as well as 

additional safety requirements for 

recreational and small commercial 

vessels operating in the RNAs. The 

RNAs are necessary to help ensure the 

safety of the persons and vessels 

operating in those hazardous bar areas. 

The RNAs will do so by establishing 

clear procedures for restricting and/or 

closing the bars and mandating 

additional safety requirements for 

recreational and small commercial 

vessels operating in the RNAs when 

certain conditions exist. 

DATES: The public meeting for the 

proposed rule will be held in Coos Bay, 

Oregon, on Tuesday, June 2, 2009, from 

6 p.m. to 9 p.m. in order to provide an 

opportunity for oral comments. Written 

comments and related material may also 

be submitted to Coast Guard personnel 

specified at that meeting. 

The comment period for the proposed 

rule will close on June 30, 2009. All 

comments and related material must be 

received by the Coast Guard on or before 

June 30, 2009. 

ADDRESSES: The public meeting in Coos 

Bay, OR will be held at The Red Lion 

Hotel, 1313 N. Bayshore Drive, Coos 

Bay, OR 97420, telephone 541–267– 

4141. 

You may submit written comments 

identified by docket number USCG– 

2008–1017 before or after the meeting 

using any one of the following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: 202–493–2251. 

(3) Mail: Docket Management Facility 

(M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590– 

0001. 

(4) Hand delivery: Same as mail 

address above, between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. The telephone number 

is 202–366–9329. 

To avoid duplication, please use only 

one of these four methods. Our online 

docket for this rulemaking is available 

on the Internet at http:// 

www.regulations.gov under docket 

number USCG–2008–1017. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions concerning the 

meeting or the proposed rule, please call 

or e-mail LCDR Emily Saddler, 

Thirteenth Coast Guard District, 

Prevention Division, Inspections and 

Investigations Branch; telephone 206– 

220–7210, e-mail 

Emily.C.Saddler@uscg.mil. If you have 

questions on viewing or submitting 

material to the docket, call Ms. Renee V. 


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