Waiver of waiting period for new participants

[Guest trirod01]

Say an employer has a 401(k) plan with a one-year waiting period before a new employee is allowed to participate. Is there a way that this waiting period can be waived for certain new employees without putting the plan at risk? I say no, since you are then going against the terms of the written plan document and, for example, Rev Proc 94-62, Sec. 4.03 states: "Failure to follow the terms of the plan is a disqualifying defect even if the operation of the plan would otherwise satisfy the qualification requirements".

But, somebody showed me this article from the NY Times, which implies waiting periods can be negotiated:

http://query.nytimes.com/gst/fullpage.html...75BC0A9669C8B63

(sorry - not sure how to insert hyperlinks)

Is this just wrong, or is there some truth to it?

Does it make a difference if the employee is an HCE?

[masteff]

This doesn't answer your question from the legal perspective but....

Reading the article, the writer is taking generalized concepts and trying to apply them at an individual level with bad results. Some companies are removing the 1-year wait for employees to make deferrals (for all employees as a whole, not for individuals). But that doesn't mean you can apply that at an individual level.

[QDROphile]

The article does not say how to effect the special entry date. No one said you can't amend the plan to provide for the exception. If you are dealing with a new hire, the prospect is unlikely to be a highly compensated employee, so discrimination should not be an impediment to the amendment. No one said that what you read has to be practical. Jounalists get paid for words, not necessarily for worth.