I have a small business 401k and PSP which has language which allows a one-time irrevocable election not to participate. An older ex owner executed this election after disclosure of the plan, but before it became effective. I assume they did this because the money would be subject to RMDs soon, and they didn’t want to have to manage another account. They received no compensation or other consideration for electing not to participate?
Is this valid? I am worried that they may claim they should have been covered, especially on the profit sharing side after some time has gone by.
Is the proper way to confirm this by requesting a private letter ruling?
