"electing out" of a 401(k) plan

[Guest mam]

Well, I've been reading in the Message Boards about excluding certaining classes of employees, and the terms "opting out" and "electing out" seem to come up quite frequently.

Legally, what is required of the employer and of the "electing" employee in order to take advantage of this election?

Also, what is the difference between "electing out" and "alienation of benefits"?

I'm investigating how to exclude an 85 year old HCE(still taking a salary) from a

401(k)Profit Sharing Plan. Excluding her by name is not an option (obviously). If the employer could use this "electing out" option in favour of excluding her in the text of the legal plan document, this would be ideal.

thanks for any ideas or suggestions.

[Guest]

'electing out' is supposed to be a one-time irrevocable election. It doesn't sound like you can do that since the person is already in the plan

if you can convince an 85 year old not to defer, then you have a big goose-egg for your test, and it will only help.

the plan document must allow people to elect out, many do not allow this option.