Deferral Election Change

[Randy Watson]

Assume a plan has a June 30 PYE. An employee made an election to defer compensation earned between July 1, 2008 and June 30, 2009. Employer wants to switch to calendar year plan year beginning with January 1, 2009. Can the employee make a new deferral election by the end of 2008 with regard to compensation to be earned in 2009 or does their initial election to defer until June 30, 2009 need to run its course?

[XTitan]

I was in a similar situation, and the client let the deferral election run as scheduled, but solicited new deferral elections in December for the following July through December. Claim was deferral election was irrevocable so it had to continue.

[GBurns]

What made the election irrevocable ? Plan terms ?

What does the PD say about changing the PY ? If you can change the PY, then you should be able to change the election to match, although it is quite possibly that by error the election terms prohibit it. Then you probably would also have to amend the plan terms governing elections.