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We have a 401k plan and last year the money purchase plan merged in. Participants in the MPPP as of 3/31 have a grandfathered nonelective contribution based on years of service. However, the employer announces that if the participant terminates employment and is rehired after 90 days, then the participant is no longer eligible for the grandfathered benefit, and instead gets the current discretionary match under the plan, which is not as generous. I am wondering if this can be written in under the eligibility exclusion provisions of the plan document, so that it is an eligibility provision. Would it then just be a matter of 410(b) coverage testing each year?

Does anyone have any thoughts?

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