Mallory H

This is what the document says. I assume this means if they have not completed the eligibility requirements by their anniversary date it switches to calendar year. The Plan defines "month of service" as a calendar month in which you complete at least 83 hours of service. Furthermore, the Plan defines "year of service" as a 12-month period in which you work at least 1,000 hours of service for the Employer. The first eligibility service period starts on your first day of employment with the Employer. For example, if you begin work on February 15, work 80 hours in February, and work at least 83 hours in each of the months of March through August, you would enter the Plan on October 1. If you did not complete six months of service by the following February 14 but did complete 1,000 hours of service by that date, then you would enter the Plan on the April 1 immediately following the completion of the one year of service.

I have a client that has a 6 month 498 hours wait for deferral and 6 month 1,000 hours wait for profit sharing, with quarterly entry. My question is: If a participant does not satisfy the required number of hours in the first 6 months, on what basis do you continue to track the hours before they are allowed into the plan? I believe that you continue to track it quarterly until the end of the plan year, and if they do not satisfy the hours requirement by then, they essentially start over next plan year and as soon as they hit the required hours they are let into the plan on the following quarterly entry date. Am I looking at this incorrectly?

Is anyone seeing an uptick in IRS audits for the 2023 plan year?