waving participation

[Chippy]

If a participant waives the right to participate in the Plan, do they also waive the right to receive the top heavy minimum as well?  

 

Thank you

[BG5150]

Are you talking about the Irrevocable Waivers?

I didn't think they were allowed any more.

[Belgarath]

Still allowed (although not in a standardized plan) if done before the employee first becomes eligible to participate in any qualified plan maintained by the employer.

[Chippy]

This was a volume submitter, so would that apply to the top heavy minimum too?

[Bill Presson]

2 minutes ago, Chippy said:

This was a volume submitter, so would that apply to the top heavy minimum too?

If it's a valid waiver, they are not a participant in the plan.

[BG5150]

1 hour ago, Bill Presson said:

If it's a valid waiver, they are not a participant in the plan.

But are counted as included but not benefitting for the three coverage tests.

[John Feldt ERPA CPC QPA]

I believe it is a 100% irrevocable waiver from all employer benefit plans now and forever. Assuming they have not already become eligible for any such plans. That includes all employer health and welfare plans, plans set up in the future, etc.  A monk or nun, for example, someone who has a lifetime vow of poverty, would be a good example of this.

[Bill Presson]

44 minutes ago, BG5150 said:

But are counted as included but not benefitting for the three coverage tests.

Correct, much like an excluded class.

[Belgarath]

Hi John - do you have a citation for that? 1.401(k)-1(a)(3)(B)(v) refers to "any other plan or arrangement of the employer that is described in 219(g)(5)(A)" - I don't see that this applies to Health and Welfare plans? Thanks. (I can't remember the last time someone attempted to waive participation in one of our plans anyway, but having said that, someone will doubtless ask about it momentarily...)

[John Feldt ERPA CPC QPA]

It may be that I am recalling how the courts deal with voluntary waivers of benefits. The 401(k) irrevocable election rule differs. I recall Derrin stating that in his experience, few waivers of benefits comply with the DOL rules. 

[Belgarath]

Ok, thanks.