Can you pick a dual eligibility date prior to inception of the Plan?

[Guest UKH]

Facts:

New 401(k) Plan effective- January 1, 2002.

Open enrollment done on October 15, 2001 informing all employees hired as of that date to be able to start contributing in the Plan as of January 1, 2002.

Can you pick October 15, 2001 as the dual eligibility date? Anybody hired between October 16, 2001 and December 31, 2001 would have to meet the eligibility.

I don't think October 15, 2001 could be used as a dual eligibility date since it is a date before the plan goes into effect. The earliest dual eligibility date would have to be January 1, 2002 when the plan was first effective.

Any feedback would be appreciated.

Thank you.

[jaemmons]

The adoption date of the plan may be used as an "x" date for waiving eligibility requirements, in your plan document. This would not constitute an entry date, because the plan isn't effective until 1/1/02. Since all employees of the employer as of the adoption date are ALL able to participate, I don't see any problem with bringing them in and making any new hires meet the plan's normal eligibility requirements. You aren't discriminating in favor of the HCE's, since all employees were given this opportunity.

[imchipbrown]

Prototypes usually have a spot where you specify eligibility requirements (one year, etc.) and Entry Dates (e.g. 1/1 and 7/1).

They also usually have a spot to waive eligibility requirements for employees employed as of x date. Could be before the effective date, sure. These employees then have met eligibility, and come in on the next (first) Entry Date.