Reduce or Stop Salary Deferral

[§#$%!]

Can someone provide a regulation that would allow a participant to reduce or stop salary deferrals immediately, or 30 days, upon a participant's request?

Thank you.

[ERISAnut]

Can someone provide a regulation that would allow a participant to reduce or stop salary deferrals immediately, or 30 days, upon a participant's request?

Thank you.

Cannot provide what doesn't exist. The written terms of the plan will explicitly state the series of events surrounding the request. If it states as soon as administratively feasible, that may be a full payroll cycle; meaning you cannot make the request the day before receiving the check and expect to halt the deduction.

That should be all you need, as the system is already built to honor an employees request to halt deductions at any time during the year; even if they state that such employee may not start back up until the first day of the following election period.

Give that a try, you should be fine.

[John Feldt ERPA CPC QPA]

Some small employers, in an effort to actually discourage employee deferrals, will have no in-service options, no payment options until retirement age (even if terminated), no loans, and only allow annual deferral changes (no revoke option, except one-time annually). Very rare, but allowable.

[J Simmons]

In many states, the payroll laws require that the EE that has made a deferral election be allowed to stop the previously elected deferrals at any time, to apply on a prospective basis. That is, some states' payroll laws require that the election for nonpayment at regular payday intervals be revocable on a prospective basis.

[John Feldt ERPA CPC QPA]

Which states?

[Guest Sieve]

I think the answer is most all states, but I can't give cites or be more specific. Maybe someone else can. And, it is for the reason mentioned by John, I believe, that most prototype basic plan documents permit cancellation of a deferral election by a participant at any time even if commencement of a deferral may only be allowed quarterly or semin-annually under the AA.