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Eligibility question


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Fact Pattern:

 403(b Plan EXCLUDES employees who normally work less than 20 hours a week.

 Employee was working full time for a few years and now is on an abbreviated schedule of 15 hours a week.

 Question:

 Does this person continue as a participant in the plan?  Or are they now no longer a participant because they are in an excluded class?

 

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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They must be permitted to continue in the plan under the "once-in-always-in" rule of Notice 2018-95.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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Thanks.  That's what I thought, but I was tripped up with the universal eligibility aspect.

To me, like in a 401(k) plan, if someone moves to an excluded class, they are no longer eligible to participate.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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18 hours ago, BG5150 said:

Thanks.  That's what I thought, but I was tripped up with the universal eligibility aspect.

To me, like in a 401(k) plan, if someone moves to an excluded class, they are no longer eligible to participate.

However, an excluded class in a 401(k) plan cannot be defined with reference to age or service.  So for example a part-time employee who moves to full-time and then back to part-time, but accumulates a year of service in between, remains eligible for the 401(k) plan.  This is pretty much the same as the rule for a 403(b) plan.

This contrasts with a situation in which someone moves into a different class of employee.  For example, if a plan covers only salaried employees, an hourly employee who becomes salaried and then reverts to being hourly would lose eligibility.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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