Eligibility & entry date

[pmacduff]

401(k) Plan with safe harbor match. Eligibility is 1 YOS, 12 months, over 1000 hours, age 21. Dual entry dates (Jan 1 & July 1). The owner's son completed over 1000 hours in calendar 2002, turned 21 in March, 2004. He worked 509 hrs. in calendar 2003 and 526 hrs. in calendar 2004. My question is, does that completed YOS over 1000 hours from 2002 stay with him until he reaches age 21 since he didn't have breaks-in-svc in '03 and '04 (over 500 hours each)? This seems like it should be a basic thing, but I'm not getting a grasp on it this busy Monday...........thanks in advance for all thoughts.

[stephen]

He should enter 7/1/04.

[K-t-F]

I disagree... I would think that the slate would be wiped clean each year. He would need to satisfy each requirement to enter the plan.

[Guest quinn the car fixer]

7/1/04--he satisfied the hours req in 1st plan yr.

he then satisfies the age req in a subsequent plan yr.

[K-t-F]

huh.... I stand corrected. So what you have is a list and as an employee meets a requirement you check it off as "met". So does he chock up a year of service for vesting for that year also? He is not eligible for a contribution but if the plan is TH does he get the 3% min because he has more than 500 Hrs? He has no balance.. is he considered a participant yet?

[Blinky the 3-eyed Fish]

PATA, there are different rules for when prior service can be discounted. I can tell you though that you need a least a break-in-service to even think about discounting any prior service. In this case, that didn't occur, so the 2002 plan year hours are in for eligibility and vesting (of course the doc could exclude YOS for vesting prior to age 18 or the effective date, but I digress).

Having a balance is not the criterion for being a participant. As for the TH, he is a participant active on the last day of the plan year, so certainly he is eligible for the TH contribution.