Can a waiver of participation be revoked by the participant?

[Richard Anderson]

Can a waiver of participation be revoked by the participant? I'm looking at a form that is titled "Election not to Participate". The last paragraph of the form states that the election will remain in effect until the participant revokes the election. I thought that a waiver of participation had to be non-revokable.

Also, if there is a valid waiver of participation, is the participant included in the ADP test? 410(B) test?

[Guest]

if person could revoke waiver, then you have created a CODA where one might not exist. e.g. a regular profit sharing plan.

as for testing, exclude from ADP/ACP

my understanding that person is not an employee for the 401(k) and 401(m) parts of the 410(B) test.

for 401(a) person is treated as includable and not benefiting.

[Guest PAUL DUGAN]

Since this posted on the 401(k) board I am assuming that the individual really is electing not to have 401(k) withheld from his/her pay. I this is the case the election can be revoked and they can start making contributions on any entry date as defined in the plan.

If the individual is not making contributions I still believe that he must be included in the 401(k) & 401(m) test as a 0.

If he is really waiving participation in the PS portion of the plan it should be unrevocable or the complete PS contribution will be treated as 401(k) contributions subject to the 10500 limit and subject to testing.

[Richard Anderson]

The employer got the employee to sign this form, thinking that it was a waiver of participation. This employee was part time, but was going to work over 1,000 hours, so in order not to have to make a top heavy (or any other) contribution, the employer had the employee sign this form. The form the participant signed says that she elects not to participate in the plan; it mentions nothing about deferrals or the 401(k) portion of the plan. It states that the election will remain in force until revoked in writing by the participant. The plan has ignored this employee up to now. She has not been included in any tests (ADP or 410(B)). Now she is working full time and they want to "revoke" the waiver.

What could the purpose of this form be? I don't think it was intended to be used as a valid waiver form. Could it be that it was intended to be used in a contributory DB plan?

[Guest]

this almost has a familiar ring to it.

you can not exclude a person from a plan as a 'part time class' this was discussed previously in another thread. it sounds like the employer tried to circumvent the syste, with a part timer, who happened to work 1000 hours. I don't see any way out of this one.

ee worked 1000 hours, should have been in the plan and received top-heavy, and a chance to defer.

ee 'waived' out. different than electing not to defer because in that case, the person would have been included in the 401(k) test, and would have been eligible for top heavy.

what a tangled web we weave, when we attempt to deceive.