Elapsed time eligibility & part-time employees

[Guest mmagidson]

Is there any way to use elapsed time eligibility (say 6 mos.) and also exclude part-time employees (say those who work less than 20 hours per week) or those who work only seasonally? I realize that the 410(B) Min. Coverage Standards don't apply to gov. plans but I know how IRS feels about excluding part-timers (Microsoft case). Since you don't measure hours for elapsed time, can this be accomplished? Thanks for the feedback.

[Carol V. Calhoun]

Yes, but the IRS really has no statutory basis to object to differing rules for part-timers in the case of governmental plans. State and local governmental plans are now completely exempt under Code section 401(a)(5)(G) from all of the rules prohibiting discrimination in favor of highly compensated employees, other than the universal coverage rule for salary reduction contributions under 403(B) plans. Other governmental plans are exempt from the minimum coverage rules, and will be exempt from other nondiscrimination rules until at least 2003. (See Notice 2001-46.)