October is late for some safe harbor notices, and not for others

Today is October 12, 2025. If a safe harbor 401(k) is supposed to sit beside a cash balance plan, this is the week owners hear a single date and treat it as the date. There is not one date. A brand-new safe harbor arrangement for an existing employer often needed the first plan year to be at least three months long, which for a calendar year points at October 1. A three percent nonelective contribution can sometimes be added to an existing 401(k) later than that. A four percent nonelective can sometimes be added later still. A safe harbor match lives on a notice calendar of its own. October is late for some of those rules. It is not late for all of them. Guessing which one you are in is how a combo design gets built on a testing exemption the plan does not actually have.

Sterling Pension Group administers and consults on the pension side. We are not an actuarial firm, and we are not your 401(k) recordkeeper. An independent Enrolled Actuary certifies the defined benefit numbers. The 401(k) provider controls that document, the notices, and the payroll feed. Nothing here is tax, legal, or actuarial advice. The practical instruction is narrower than a legal opinion: do not pick a safe harbor deadline out of a briefing and amend the plan yourself.

The cash balance plan is not the safe harbor

Safe harbor, in this conversation, is a 401(k) testing design. It is a way of satisfying the ADP test, and often the ACP test, by committing to a stated match or a stated nonelective contribution and, where the law still requires it, telling employees in time for them to decide whether to defer. A cash balance plan does not become safe harbor because it is paired with a 401(k). The pension has its own coverage and nondiscrimination rules. The 401(k) has its own. A combo passes only if both sides are designed together and the data is shared. Calling the whole arrangement "a safe harbor combo" is a shorthand. It is not a rule.

For 2025, the elective deferral limit is $23,500. The ordinary catch-up is $7,500. Ages 60 through 63 use $11,250 instead. The defined contribution annual-additions limit is $70,000, before catch-up. The compensation cap is $350,000. The defined benefit dollar limit is $280,000 of annual benefit, not of deposit. The IRA limit is $7,000. Those figures come from IR-2024-285. They tell you the size of the defined contribution layer. They do not tell you whether your 401(k) is safe harbor, and they do not move because you missed a notice.

Owners sometimes want the safe harbor label because they are highly compensated and they do not want their deferrals refunded after an ADP test. That concern is real when the plan covers non-highly compensated employees who do not defer. It is a different concern when the only participants are owners, or owners and spouses who are themselves highly compensated. In that second case the ADP test often has no non-highly compensated employee to fail on. Safe harbor may be unnecessary overhead. It may still be useful for top-heavy reasons or because the census is about to change. The point is that "we should be safe harbor" is a conclusion that follows the census. It is not the first sentence of the design.

What October 1 actually was

For a new 401(k) that wants to be safe harbor in its first year, the first plan year generally has to be at least three months long, unless a narrower exception applies, including an exception some brand-new employers can use. For a calendar-year plan at an existing practice, that general rule is why October 1, 2025 mattered. A plan that was not effective until after that date generally cannot use a short 2025 year as a safe harbor year. Today is October 12. That particular first-year window, for an existing employer who wanted a new calendar-year safe harbor 401(k) to operate in 2025, has closed.

"In place" meant more than a decision. It meant a document that had been adopted, a payroll path that could take deferrals, and employees who could actually contribute for those months. A conversation with a recordkeeper on September 28 was not the same thing as a plan that had been running since October 1. If that work was not finished, do not describe the 2025 401(k) as safe harbor in a cash balance proposal. Say what it is: a plan that may need ordinary ADP testing, a plan that might still add a nonelective safe harbor if the document and the timing allow it, or a plan you will not try to force into a label it missed.

There is a limited exception when the employer itself is new. Most readers of this briefing are not new. They have been filing returns for years. Do not borrow the new-employer exception because the pension idea is new. The business is not.

The nonelective path is a different calendar

Congress changed the nonelective safe harbor rules. For plan years beginning after December 31, 2019, the advance safe harbor notice is no longer required for a nonelective safe harbor the way it is still required for a match. An employer can amend an existing 401(k) to add a safe harbor nonelective contribution of three percent as late as the 30th day before the end of the plan year. For a calendar-year plan, that points at December 1, 2025, not at October 1. If the amendment instead provides a nonelective contribution of at least four percent, it can be adopted as late as the last day of the following plan year. Those are amendment windows with conditions, not a single October deadline that governs every safe harbor design.

Read the conditions before you treat December 1 as a universal rescue. The plan generally cannot already be using a matching safe harbor in a way that blocks the switch. The contribution is for eligible employees, not a quiet extra deposit for the owner. A three percent nonelective on a payroll that includes staff is a real cash cost, and in a combo it interacts with the pension formula, the gateway, and the deduction the CPA will eventually be asked to sign. A four percent version costs more and buys a later amendment date. Later is not free. It is also not available just because someone prefers to decide in March. The 401(k) provider has to say whether this document can be amended that way, and the pension actuary has to say what the combined design still supports.

A match does not get that retroactive kindness. Employees decide how much to defer based on the match they have been promised. Turning on a safe harbor match after the year is underway, or after the year is over, generally fails that logic. If what you wanted for 2025 was a match, and the notice and the formula were not out in time, the nonelective discussion is a different design, not a late version of the same one.

The 2026 notice window is still open for some plans

Separate the year you are trying to repair from the year you are trying to set up. For an existing 401(k) that will use a safe harbor match in the 2026 calendar year, the notice is generally due 30 to 90 days before the plan year begins. Counted back from January 1, 2026, that window runs from early October through roughly December 2, 2025. On October 12, that window is open. October is not late for that notice. It is the start of the period in which the notice is supposed to go out, not a eulogy for it.

This is why a single sentence — "we missed safe harbor" — is too crude to act on. You may have missed a new 2025 safe harbor year because October 1 passed. You may still be able to add a 2025 nonelective if the plan already exists and the provider confirms the amendment rule. You may be exactly on time to notice a 2026 match. You may not need safe harbor at all if the 2025 census has no non-highly compensated employees. Those are four different facts. A colleague who "got in by October" may have been solving a different one.

Nonelective safe harbor for 2026 may not need the same advance notice. That does not mean you should ignore the 401(k) provider until next fall. Payroll, eligibility, and the pension formula still have to be designed together. A deadline calendar is useful only if each row is labeled with the job it belongs to. A safe harbor notice, a pension funding deadline, and a Form 5500 due date can fall in the same season and still have nothing to do with each other.

The 2025 Form 5500 rules are not the safe harbor rules, but owners collapse filings when they are anxious. A calendar-year Form 5500 is generally due July 31, extended to October 15 with Form 5558. The IRS Form 5500 corner and the Department of Labor's filing guidance describe that return. Filing it, or extending it, does not create a safe harbor notice you did not give. Publication 560 is the small-business overview to read with your CPA. It is not a notice you can hand employees in place of the one the 401(k) document requires.

What the provider has to answer before the pension formula is locked

Bring the 401(k) provider a short list, in writing, and wait for the answers before an actuary spends a cycle on a combo that assumes a testing exemption you do not have. Ask whether the plan is already safe harbor for 2025, and if so whether it is a match or a nonelective, and at what percent. Ask whether a nonelective amendment is still available for 2025, at three percent or at four percent, and what the document's amendment clause actually requires. Ask what notice, if any, must go out this fall if you want a match safe harbor for the 2026 year, and who sends it. Ask whether the provider will share census and contribution data with the pension administrator. A brokerage platform built for a solo 401(k) sometimes will not. That is a migration project, and migration projects do not finish in a holiday week.

Also ask who is highly compensated on this year's definition, and who might become eligible in the first quarter of next year. A hire you intend to make in January can make a 2025 owner-only conclusion obsolete the moment eligibility runs. Safe harbor is sometimes adopted precisely because the owner knows the census will not stay owner-only. If that is the reason, say so now. Retrofitting it after the associate has been paid for half a year is the timing problem this briefing is about.

The pension formula should not be presented to you as "your deposit" with a parenthetical that staff will be handled later. In a combo, staff cost is part of the design. So is the question of whether employer money in the 401(k) plus employer money in the cash balance plan will fit inside the deduction rules that apply when both plans cover the same people. PBGC coverage can change that deduction analysis, and coverage is plan-specific. The Pension Benefit Guaranty Corporation explains the categories on its coverage page. Your 401(k) provider will not answer the PBGC question. The enrolled actuary will not send the safe harbor notice. Administration is the coordination of those jobs, not a hope that one vendor meant the other vendor's deadline.

If the safe harbor path for 2025 is closed, the pension is not automatically closed. A cash balance plan can be designed for a year in which the 401(k) is tested under the ordinary rules, or for a year in which only employer money goes into the defined contribution plan, or for a year you deliberately leave the 401(k) alone. Each of those is a real design. Each of them is worse if it is chosen by accident because a notice date was misunderstood. The defined benefit limit of $280,000 remains a benefit limit, described by the IRS on the benefit limits page. It does not grow because the 401(k) missed safe harbor, and it does not shrink because you are annoyed at the notice rules.

What to do in the next two weeks

Write to the 401(k) provider before you write to anyone else about safe harbor. Ask the three questions: what is the plan for 2025, what amendment window if any is still open for a nonelective, and what notice date applies if a match safe harbor is wanted for the coming calendar year. Attach the current adoption agreement if you have it. If you do not have it, ask them to send it. Do not rely on a summary from a payroll portal.

Send Sterling, or whoever is coordinating the pension, the provider's answer rather than a paraphrase. If the answer is that 2025 safe harbor is not available, say that plainly so the design does not assume it. If you have employees, include the census. Two weeks from today is October 26, which is still before December 1, and still inside a typical advance-notice window for a next-year match. It is not a reason to wait another month to ask the question. Start that coordination with the provider's reply attached. The owner who guesses a single deadline will guess wrong often enough that the correction costs more than the email.