Payroll Deferral Election Changes

[Gadgetfreak]

I spent nearly an hour searching here and the ERISA Outline Book.

Can anyone point me to the regs that discuss that a participant can cease their elective deferrals at any time during the year and doesn't need to wait until the election change period specified in the Document? I am specifically looking for something that says whether the employer must cease them immediately (next payroll), within 30 days, or as soon as administratively feasible.

Thanks.

[ETA Consulting LLC]

I have never seen a plan document without that language. You should start there. Your argument would go along the lines of stating that it is a requirement to be included in the plan document. I wouldn't necessarily disagree with you, but think this conclusion would be a culmination of several rules. I would even argue that if you, at the very least, do not have an option to discontinue, then it is no longer 'elective'; but that's just hyperbole.

Good Luck!

[John Feldt ERPA CPC QPA]

I thought the law/regs could allow the plan administrator to establish a uniform policy that dictated the frequency of deferral changes, including how often changes and revocations could be made, as long as these changes where available at least once per year. I did not look this up just now, that's just a vague recollection. You should definitely check the plan document.

[Gadgetfreak]

From an Accudraft SPD (volume submitter):

After your initial election, you can change your Salary Deferral Agreement by filing a new agreement with the Administrator at any time during the Plan Year. You can also cancel your deferral agreement at any time by giving written notice (not to exceed 30 days) to the Administrator. If you do cancel your agreement, you will not be permitted to make a new election until the first available date that you would

otherwise be entitled to change an existing agreement as described in the preceding sentence. The Administrator from time to time may establish additional administrative procedures (or change existing

procedures) concerning deferral elections, in which case you will be appropriately notified.

Are there any regs to support the "You can also cancel your deferral agreement at any time by giving written notice (not to exceed 30 days) to the Administrator."? Or do you think it is just built into the Doc and it is not a standard rule? And what do you think the "not to exceed 30 days" mean?

[GMK]

From an Accudraft SPD (volume submitter):

And what do you think the "not to exceed 30 days" mean?

I'd guess that it means that the cancellation date you specify has to be within 30 days of the date you give notice of the cancellation.

[Guest Sieve]

RPG -- What you quote is a plan document issue. For confirmation of J4's position, see Treas. Reg. Section 1.401(k)-1(e)(2)(ii).

[K2retire]

If the document says you can only make changes at a certain time, then I don't think you can cease at any time. From the wording of the original post, I suspect RPG is hoping that there is a reg that contradicts the document language.

[Guest Sieve]

Some documents permit deferral changes at certain times and cessation at any time--as indicated in the SPD quoted by RPG. But, without separate cessation language, K2 is correct--ceasing a deferral is simply a deferral change and therefore must follow the plan's deferral change/modification provisions. There is no reg giving a participant the ability or the right to cease deferrals at any time that does not correspond to administrative practice or plan provisions.