How to Terminate a Salary Deferral Agreement
- 1). Review your salary deferral agreement paperwork. Some arrangements may be permanent or have restrictions, while others may have specific instructions regarding what you must do if you intend to terminate. While many agreements are similar, your plan will have an individual agreement specific to your plan only.
- 2). Contact your plan administrator. This will usually be your employer. Ask for the documents needed to request a termination of your salary deferral agreement.
- 3). Verify the terms of the termination. Check if there are any fees or monetary consequences to ending your agreement. Confirm the date when the termination will occur.
- 4). Review the tax consequences. Most salary deferral agreements withdraw money from your paycheck before you have to pay taxes on it, but some plans deduct money on an after-tax basis. You may want to consult with a tax adviser to determine the effect the termination of your plan will have on your overall tax situation.
- 5). Complete the appropriate paperwork. Terminating your agreement may be as simple as signing your name to a specific salary deferral termination form. Other agreements may require additional information.
- 6). Confirm the termination. After the date of your scheduled termination has passed, review your next paycheck stub to see if your employer is still withholding any of your pay. If you see any deductions, contact your employer immediately.
