DOL recommending suspending deferrals until late contributions are caught up

[Guest cbjohnson]

Has anyone dealt with a situation where the client has been behind on contributions and the DOL gets involved? The DOL is recommending suspending deferrals until the employer is caught up on the late contributions. Do you have the participants sign deferral agreements electing 0%? Do you amend the plan to discontinue deferrals for a period and then amend the plan to add the deferrals back when they are caught up? Any insight would be wonderful.

[WDIK]

It seems logical to me that if there is to be a blanket suspension of deferrals then a plan amendment discontinuing deferrals would be the most appropriate. Consider the possibility of a stubborn participant who refuses to change the deferral election.