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Eligibility related


Jakyasar
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Looking at a plan doc prepared by another. Calendar plan.

401k eligibility is 6 months (in which 1000 hours of service is required) with entry date first month following completion of 6 months. Can the plan require 1000 hours of service where eligibility is 6 months?

PS is 12 months with 1000 hours so this is fine. Entry date is dual entry, 1st and 7th months.

Thank you

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You can let them in after 6 months if they complete 1000 hours in 6 months, but you can't keep them out if they complete 1000 hours in more than 6 but within 12 months.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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If that's what the plan says.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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Often though, the "plan B" eligibility provision, the 1000 hours in 12 months, requires the full 12 months to elapse like a traditional Year of Service requirement, so it's possible the guy who hits 1000 hours in month 8 doesn't come in until after the full 12 months elapse.  So as CBZ said, definitely check what the doc says to that effect.

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