automatic deferrals and QACA

[Scuba 401]

lets say the plan has a non statutory automatic deferral provision (not a QACA or EACA). the participant with no elections on file takes a hardship distribution. do you resume the automatic deferrals at the time the participant is eligible to defer again if they continue to have no elections on file?

[Guest Sieve]

As opposed to when?

Depends on the document and how the plan is administered (since we have virtually no guidance re: plain vanilla negative election plans). I would say, however, that you probably ought to start with a new automatice deferral at the appropriate time (i.e., when again eligible for deferrals or at the next automatic deferral entry/change date).

[Scuba 401]

As opposed to when?

Depends on the document and how the plan is administered (since we have virtually no guidance re: plain vanilla negative election plans). I would say, however, that you probably ought to start with a new automatice deferral at the appropriate time (i.e., when again eligible for deferrals or at the next automatic deferral entry/change date).

nothing in the plan document. i agree there is no guidance. seems to me they ought to start with deferrals but if they didn't should they correct or let sleeping dogs lie. absent guidance it would seem like they could just do things differently going forward. (ie. restart the negative election).

[TPAMan]

The documents we use require a six month suspension of salary deferrals when a safe harbor hardship distribution is made, hence we restart salary deferrals after six months. I guess I don't understand why it would be different for an ACA, QACA, or EACA?

[Scuba 401]

The documents we use require a six month suspension of salary deferrals when a safe harbor hardship distribution is made, hence we restart salary deferrals after six months. I guess I don't understand why it would be different for an ACA, QACA, or EACA?

i don't think it would be but i am trying to see if anyone sees a basis for suspending deferrals and not restarting since our clients. is it reasonable to argue that since there is no statutory guidance one way or the other the sponsor can suspend and then not resume?