Rollovers to the 401k plan from Employee who has not satisfied the one year wait/eligibility

The Plan document says the following:

Eligibility. Rollovers may be accepted from all Participants who are Employees as well as the following
(select all that apply; leave blank if not applicable):
a. [X] Any Eligible Employee, even prior to meeting eligibility conditions to be a Participant

Does this leave any discretion for the Plan Sponsor to not allow rollovers from employees who have not met the plan's eligibility requirement?  Or must they allow the rollover?

I'd think there had better be a compelling alternative reason not to follow the plan's terms.  I suppose "may" buys you some leeway, but as to how much.....and more importantly, why?  They obviously signed a document presuming folks would come with rollovers ahead of their plan participation, so why don't they like the idea now?

I don't think "may" gives the plan sponsor the discretion to pick and choose from who to accept rollovers. 

The plan should consider identifying what the plan will not accept as a rollover and apply that to all rollover requests including those of employees who have not yet met the plan's participation requirements.  This may include requiring all rollovers to be in cash (or identifying unacceptable assets like LPs, real estate...), not accepting loans, not accepting Roth or after-tax, not accepting life insurance, and other similar restrictions designed to keep the plan investments clean.

The plan should avoid exercising discretion over whether an individual is allowed to make a rollover contribution into the plan.

In the absence of other indicators that the use of "may" intended to confer discretion on the plan sponsor, the plan sponsor should accept tendered rollovers that meet the requirements.  That's just my opinion, construing to favor the employee and retirement savings options.  Obviously the drafter of this plan was too loose, so I expect it is not a prototype or the like.  Words such as "may" and "shall" and "must" and their negatives should always be used very carefully.

What does the BPD say?  I bet it goes into more detail and clears up any ambiguous term in the AA.  

14 hours ago, RatherBeGolfing said:

What does the BPD say?  I bet it goes into more detail and clears up any ambiguous term in the AA.  

I agree, and I want in on that bet. I expect the "may" is meant not to decide WHO is allowed to do a rollover, but more WHAT rollovers may be accepted. The Plan Administrator has the right to reject a rollover request if, for example, it would jeopardize the tax-qualified status of the plan, or if there's no evidence that the rollover is from acceptable qualified source, etc., etc.