Excerpt: The advantage to the employer in offering early eligibility in a 401(k) plan is that the employer can provide a popular low cost benefit to the employees. The disadvantage of offering early eligibility is that part-time and short-term employees become eligible to participate. Since the part-time and short-term employees almost always are nonhighly compensated employees (NHCEs) and usually defer less than other NHCEs, the plan may have difficulty in passing the ADP test.  MORE >>