A 401(k) plan can be created at any time during the year. However, a Safe Harbor 401(k) plan must exist for a minimum of 3 months in its initial plan year. So, that means a Safe Harbor 401(k) plan must be established before October 1, 2021 for the 2021 plan year.
With a Safe Harbor 401(k) plan, the company is required to provide a 3% non-elective contribution to all eligible employees or a matching contribution up to 4%. Company contributions are 100% vested to the employees. By following these rules, the owners and other highly compensated employees are able to save the maximum allowable amount from their salary ($19,500 or $26,500 for those over age 50).