Owner opt out of receiving 401(a)?

[Guest jusducki]

This 401(k) with Safe Harbor feature has decided to make a discretionary PS contribution - the first one since Plan inception ten years ago. The owner prefers not to receive any of it - can he simply waive his right? If so, would the waiver be permanent or can it be a year by year thing? Thanks in advance...

[PLAN MAN]

I'd say the first thing to do is read the plan document. Do you find any provision in there that would allow an employee to waive receiving the profit sharing contribution?

[Tom Poje]

there is something called a one-time irrevicable waiver, but according to your comments the plan has existed for 10 years, so it is a little late for that.

if plan has a last day provision, then you could amend the plan to exclude the individual from the discretionary profit sharing, but that is about the only way I know how to handle it. if there is no hours requirement or last day provision, then the person in question has already accrued the money.

If there was a way to do it, I would be more than happy to accept the money, but I don't think you can do that either.

[Belgarath]

The IRS has approved, in some volume submitter documents, such a "waiver" - or whatever term is used to define it - by the HC employees. Apparently, they let it go through in some prototype documents during the GUST restatement, but I have not personally seen a newer prototype where it is allowed, whereas I have personally seen it in VS documents. I'd stick with Planman's advice and check your document - it should be pretty clear as to whether permissible or not.