One-time irrevocable election not to participate

[Rg]

I have a small business 401k and PSP which has language which allows a one-time irrevocable election not to participate. An older ex owner executed this election after disclosure of the plan, but before it became effective. I assume they did this because the money would be subject to RMDs soon, and they didn’t want to have to manage another account. They received no compensation or other consideration for electing not to participate?

Is this valid? I am worried that they may claim they should have been covered, especially on the profit sharing side after some time has gone by. 
 

Is the proper way to confirm this by requesting a private letter ruling?

[Bird]

If they executed the election then that means they cannot be in the plan, ever. If they signed it they can't say they should be covered so I think you are ok in that regard.

Most of us in the biz don't like irrevocable elections for various reasons, but if it already exists, so be it.

[MWeddell]

Instead of requesting a private letter ruling, you might carefully review Treasury Regulation Section 1.401(k)-1(a)(3)(v) to make sure that the one-time irrevocable election does not have to be treated as a 401(k) cash or deferred election.

[Lou S.]

Assuming the election was validly executed I don't see where you have a problem...unless it triggers coverage issues which is a large part of the problem with irrevocable elections that Bird eludes to in post above especially in the micro plan market if the election is made by someone who isn't always an HCE.