one time irrevocable election

[Guest Brenda Schachle]

Where can I find info regarding the one time irrevocable election not to participate? We have a takeover plan which originally was profit sharing only. Dr Y participated. Dr X made irrecovable election not to participate. Amended to add 401(k) in 2000. Drs X and Y say they made an irrevocable election "not to participate" at that time. Prior TPA did not include X or Y on ADP test nor did they (when other owners did) receive the 3% Top heavy minimum. They can't do that -- can they? Once some time period has elapse, I thought Dr Y could not make such an election. Also, seems like there was some issue about owners not being able to use this election for 401(k) plans --

Plan Doc says -- participant may "waive Participation in the Plan for any Plan Year. A waiver will be permitted only if it does not adversely affect the Plan's tax qualified status."

Could Dr Y have made an irrevocable election years after the original PSP effective date? Are X and Y included in the ADP test?

[Tom Poje]

1.401(k)-1(a)(3)(iv)

A one time elcetion is not treated as a deferral election

A cash or deferred election does NOT include a one time irrevocable election upon an employee's COMMENCEMENT of employment or upon the employee's first becoming eligible under ANY plan

1.401(k)-1(g)(4)(ii) adds that a person making a one time election is not an eligible employee.

......

If you are not eligible, then you are not on the ADP test. Though this could cause coverage to fail since this exclusion is not due to age / service.

if you were ever in a plan then you can not make the 'one time election'. you can elect not to defer, but that is not the same thing.