keeping the PS portion from a 401(k) PS Plan

[Santo Gold]

Small employer has a 401(k) plan but, after several years has decided he no longer wants to allow 401(k) contributions. He wants to eliminate the 401(k) feature, but keep the discretionary PS piece. Is a CODA a protected benefit and therefore, is he prevented from eliminating it? Also, since this is not a plan termination, the participants could not take distribution of their 401(k) monies, correct?

Finally, since 401(k) language is throughout the entire document and SPD, if the above is permitted, would you restate the entire document and SPD, or handle the change via a 1-2 page plan amendment, with an SMM?

Thank you

[Guest Pensions in Paradise]

The 401(k) portion of the plan can be eliminated prospectively.

Correct, the participants cannot receive a distribution of their 401(k) money until they terminate employement (or the plan is terminated).

Either method is acceptable. My preference would be to restate the entire plan, cleaner that way. If you do restate the plan remember that you have to include a provision for the frozen 401(k) accounts.