Exclusion of Previously Eligible Employees

[Guest lforesz]

We have a 401(k) plan that wants to prospectively exlude hourly employees from participating in the Plan. I am trying to figure out if this is a 204(h) notice event. I seem to be finding that if it is not a 411(d)(6) protected benefit (or if is but none the less can be eliminated or reduced) then a 204(h) notice to this group of employees is not required. Can anyone help me out?

Thanks

Lori

[mbozek]

While I have not reviewed the revised 204(H) regs I recall that 204(H) was intended to apply only to pension plans and not profit sharing plans.

[Guest LKHartnett]

I am sure you have already looked into the discriminatory issues that might arise from excluding hourlies? No problems?

At any rate, 204(h) isn't required, but an SMM, or the newly drafted SPD is. Either document serves as notice in this situation, and is a required disclosure under Title I of ERISA anyway. All participants must receive a copy of the SMM/new SPD, including those who were eligible to participate but will not be eligible going forward.