Eligibility

[Guest Ephesian431]

Is it allowable to have a 500 hour, last day requirement and a provision for employment of at least one hour of the previous year? If it is allowable, are there any implications of the provision?

[Guest MelissaA]

I have been searching for the law or regulation which permits a company to base eligibility to join a 401K or ESOP plan on age. I have read that they are allowed to exclude those under 21. Does anyone know why this is allowed or where I can find more information? It's seems discriminatory that I am not allowed to join because I am only 20. Why would the government allow this?

[Guest]

since a plan can require a one year wait, it is certainly possible to have a plan (as a side effect) require you work at least one hour in the prior year. In the case of a rehire, a plan could require you to work 1000 hours before reentering the plan. (assuming you were a prior participant) o again, yes, technically you can 'require' someone to work at least one hour in the prior year. but that is really only a side effect of plan provisions. it is not something you put into the plan "Must work one hour in prior year"

in the case of a 401(k) you would not want this provision for rehires, because the entry date becomes retroactive once you meet the eligibility requirements. the employee can not defer on those amounts as they are long past, and you could end up with a big goose egg on the ADP test as a result.

in the case of age 21, yes, the regulations permit this. why? why is the drinking age what it is in some states? why is normal retirement considered age 65? age is, in someways, an arbitrary figure, simply selected at one time or another. if I am not mistaken, at one time it was age 25 - it still is in the case of 403(B) plans! If you work 1000 hours, you will still receive credit for vesting for years after age 18, so go and figure. yes, some things seem a bit unfair, but thats the law. sorry.