Timing of Amendment to Exclude HCE

[Guest notapensiongeek]

We have a client with a 401(k) Profit Sharing Plan that would like to exclude an HCE from plan participation by name. The employee in question was hired 10/01/2008 and would be entering the plan on 1/01/2010. When did / does the amendment have to be executed by in order to accomplish this? Should it have been executed by 10/01/2008 or can we do it currently since he hasn't entered the plan yet?

Any input would be greatly appreciated.

Thanks!!

[J Simmons]

We have a client with a 401(k) Profit Sharing Plan that would like to exclude an HCE from plan participation by name. The employee in question was hired 10/01/2008 and would be entering the plan on 1/01/2010. When did / does the amendment have to be executed by in order to accomplish this? Should it have been executed by 10/01/2008 or can we do it currently since he hasn't entered the plan yet?

Any input would be greatly appreciated.

Thanks!!

You can do it anytime. If the HCE has accrued benefits before then, the HCE stops accruing additional benefits, but cannot have those already accrued taken from the HCE.

If the HCE is signing a one-time, irrevocable election for more pay in lieu of ever participating in the 401k PSP, such must be signed and delivered to the plan administrator before the HCE ever becomes eligible for any retirement plan of the ER.