The sponsor of a small non-standardized MP plan is having financial woes and is looking for ways to save $$$. They currently sponsor a 5% MP plan. The owner wants to maintain that plan, at that funding level, but would like to discontinue accrueing benefits for himself. Since roughly 70% of the annual contribution goes to him, this would be a significant savings. Assuming the document language allows for it, can he waive participation in the plan, even though he has previously met the eligibility requirements?

Thanks

Yes.

I think prospectively the plan should be amended to exclude him. The concept of a waiver implies he has a choice and that could lead the IRS into a CODA argument. I think the better way is to exclude him prospectively by amendment.

Also, I would be concerned if he is waiving benefits he has already accrued. Does he want to waive his '05 allocation? If so, I'm not sure this would be permitted since Funding Standards apply to MP Plans. Therefore, he would be forfeiting a benefit in order to avoid a required contribution which I don't think is permitted. (That is a DB rule, but it may apply to MP plans as well.)