Plan Eligibility

[Guest Bob Lees]

We are talking with a prospective client about their 401(k) Plan.

They want to change the eligibility in their plan from a one year service requirement to no service requirement. Their current provider is telling them that they can't do this without terminating the plan.

I was under the impression we could amend plan eligibility.

what am I missing? thanks.

[WDIK]

I must be missing something, too, because I see no reason that a plan's eligibility requirements cannot be amended. Furthermore, in this case the amendment will result in more liberal plan provisions, so no benefits or rights are being eliminated.

[stephen]

I agree with WDIK!

[Guest Pensions in Paradise]

What type of document are they currently using? The only thing I could think of is that they are on a super-simple standardized document which does not offer the immediate eligibility option. Hence the current provider is telling them it can't be done. But of course, the plan can be amended/restated onto a different document.