Participant does not want to receive SH Non-Elective

[Bruddah Kimo]

Participant in a Safe Harbor 401k is refusing to receive a Safe Harbor Non-Elective contribution as he believes the 'government will take it from him'. He is being adamant that no monies be placed into an account for him and is causing trouble with the employer. He is asking for a citation to prove he must receive these monies. Can he deny receiving the contribution without implications on the Plan's Safe Harbor status? Where would I find the citation regarding this? Thank you!

[BG5150]

Does the plan allow an irrevocable election to not participate? Use that.

(However, I thought that it would have to be signed prior to becoming eligible.)

You could give him a unique job classification and exclude that classification from the plan as long as you pass coverage, I think.

[david rigby]

... or the ER could ask him how he is harmed by receiving something free.

... or the ER could ask itself/himself/herself about whether such employee...

[Bruddah Kimo]

BG5150 - the Plan does not allow a waiver of participation. Also - this regards the 2009 SHNE allocation to be made to EE's now. Don't think I can retroactively do the Job Classification exclusion without running into cutback issues.

David - ER has already asked the EE about the problem about accepting something free. He just doesn't care and does not want the contribution. Unfortunately, I can't tell the ER to fire the guy and 2009 is already in the books anyway.

He wants me to provide a citation which proves he must receive the contribution in an account setup for him against his wishes.

[Kevin C]

The terms of the plan determine who gets employer contributions, including the SH non-elective. Give him another copy of the SPD and point out the section that describes the 3% SH contribution.

I wonder if he thinks he will get the 3% in cash if he can get them to let him waive the plan contribution?

[Tom Poje]

the preamble to the final 401(k) regs states the following:

4. Safe Harbor Section 401(k) Plans

Section 401(k)(12) provides a design-based safe harbor method under which a

CODA is treated as satisfying the ADP test if the arrangement meets certain contribution

and notice requirements. Section 1.401(k)-3 of these final regulations, which sets forth the

requirements for these arrangements, generally follows the rules set forth in Notice 98-52

and Notice 2000-3. Thus, a plan satisfies the section 401(k) safe harbor if it makes

specified QMACs for all eligible NHCEs.

I will be glad to volunteer my name if the participant wishes his safe harbor contributionto go to someone else, or has the line already formed?.

[Bird]

Ignore him and set up the account and move on to your next item of business.

[Jim Norman]

Ignore him and set up the account and move on to your next item of business.

The Bird is the Word

[Bruddah Kimo]

Thanks everyone for your assistance!!!

[TPApril]

I'm curious to know how this turned out?