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Showing results for tags 'long-term part-time employee'.
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When the time comes and with some exceptions, a non-governmental § 401(k) plan must (to tax-qualify) permit an employee to make elective deferrals if the employee has at least 500 hours of service a year in at least three consecutive years and has met the plan’s age requirement (for example, 21) by the end of the three-consecutive-year period. A plan need not provide nonelective or matching contributions for such a long-term part-time employee. Relief from nondiscrimination and top-heavy rules applies only regarding “employees who are eligible to participate in the [§ 401(k)] arrangement solely by reason of [§ 401(k)](2)(D)(ii)[.]” I.R.C. (26 U.S.C.) § 401(k)(15)(B)(i); accord § 401(k)(15)(B)(ii). Some employers are considering simplifying a new provision by making all employees, with no age or service condition, eligible for elective deferrals (without providing a nonelective or matching contribution). If an employer in its particular circumstances is not worried about coverage, nondiscrimination, and top-heavy rules: Is there some other reason an employer should consider not extending elective deferrals to all employees?
