IRS allows mid-year reduction or suspension of safe harbor nonelective contributions in cases of substantial business hardship

The Internal Revenue Service has issued proposed regulations that permit a sponsor of a 401(k) or 401(m) safe harbor plan, which satisfies the Internal Revenue Code’s (the “Code”) nondiscrimination requirements by relying on the nonelective contributions safe harbor method, to reduce or suspend its safe harbor contributions after the start of the plan year if the employer has incurred a “substantial business hardship.”