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Practice Management

Optional Features Under Safe Harbor Arrangements

Q. May a "safe harbor arrangement" under Department of Labor regulation 29 CFR 2510.3-2(f) make optional features, such as participant loans, available if the 403(b) provider is responsible for any discretionary determinations?

A. Yes. The employer also may refuse to include 403(b) contracts and accounts in its safe harbor arrangement with such optional features if that limitation is intended to reduce the employer's costs in offering the safe harbor arrangement or is designed to remove features that in operation could result in the employer being forced to take steps that would exceed the employer involvement permitted under the safe harbor.