A qualified plan provides that employer contributions are made in accordance with a collective bargaining agreement ("CBA"). The CBA provides that only employees who work more than 1600 hours during a plan year will receive an allocation. I don't think this is permissable. 2530.204-2 dealing with partial years of participation applies only to defined benefit plans. Any thoughts? Thanks. Ed

My understanding is that you must grant allocations to active employees if they work at least 1000 hours in a plan year. The only exceptions to this that I know of relate to DB plans, where a plan can condition accruals on an elapsed time basis, or use a schedule based on hours worked, but an employee working 1000 hours must receive at a minimum 1/2 year of service. It would be OK to condition accruals on working the entire plan year for terminated employees (i.e. last day worked rule) but then this would have to be tested for discrimination purposes on an annual basis.