lost salary deferral agreements

[k man]

the employer can't locate most of the actual salary deferral agreements from the current participants in the plan. to fix this problem, they want to revoke all the existing agreements and get new ones from all the participants. my thinking is this is the only solution. however, i am concerned that one might come forward later. is there authority that allows a plan adminsitrator the ability to cancel salary deferral agreements at any time and get new ones?

[Guest Sieve]

The regs don't prohibit it. Would seem to me that, administratively, the administrator can set up any reasonable process re: deferral elections--even requiring annual renewals, if it chooses to--much the same way that it can eliminate the deferral elections of HCEs if necessary to pass ADP (assuming the plan permits it).

[JanetM]

Is this a small plan where the ER is the main contact for changes to the plan or a large plan where participants go online to TPA site and make changes that flow back to ER payroll system? If this is small plan, just send out confirmation letters ... Dear employee, our records indicate you elected 10% of your pay to be contributed to the 401k plan. Please confirm this is correct or complete the form to elect new %.

Keep it simple. Don't cancel anyones elections, has a negative conotation.

[k man]

Is this a small plan where the ER is the main contact for changes to the plan or a large plan where participants go online to TPA site and make changes that flow back to ER payroll system? If this is small plan, just send out confirmation letters ... Dear employee, our records indicate you elected 10% of your pay to be contributed to the 401k plan. Please confirm this is correct or complete the form to elect new %.

Keep it simple. Don't cancel anyones elections, has a negative conotation.

unfortunately its a big plan...alot of participants in many differerent locations. the reason i want to cancel all the elections is that if the participant comes forward and contends they had elections and the employer failed to follow them, the correction method is to have to make the contribution for the participants. this could cost a lot of it happens to alot of people.

[Kimberly S]

That could still be true even if you cancel them.

[JanetM]

Any change you make should be prospective, like require renewal of %. Send out notice that all participants need to call/go online/mail new deferral elections by specific date. If new election is not made you can set a default election (of course you would have to amend plan to include this provision).