Stopping all 401(k) contributions temporarily

[Santo Gold]

A plan sponsor's 401(k) plan was badly mismanaged by the the new (and now former) investment agent, complete with money not being invested timely, bad information being given to the participants, etc. A few participants have requested that their current 401(k) contributions cease, at least until this situation is resolved. Can the sponsor temporarily stop all 401(k) contributions, for maybe 4-5 months, until these problems are fixed, and then resume contributions again for all who are interested in re-starting?

[Tom Poje]

usually the document will say how often someone can change his deferral election.

certainly one is entitled to stop. if you stopped now there is certainly nothing that I know of from preventing you from begining again in 7 months (assuming calendar year plan)

[Bird]

Yes, I think the sponsor can suspend 401(k) contributions and re-start them later.

[Guest Pensions in Paradise]

Im my opinion this would have to be done through a plan freeze. Unless your document has some language which permits the plan sponsor to arbitrarily cease participant contributions.