Carve out base on hours

[Guest Benny Guy]

Can we change employer contribution matches based on hours worked?

For example, employees with 20-30 hours per week get no match

30-35 get a 3% match

36+ get a 3% employer contribution and a 3% match

[cpc0506]

Can we change employer contribution matches based on hours worked?

For example, employees with 20-30 hours per week get no match

30-35 get a 3% match

36+ get a 3% employer contribution and a 3% match

I don't believe that you can require more than 1000 hours to get a contribution or level of contribution. You are doing that with your formula. If a participant works 20-30 hours a week, they are worked more than 1000 hours.

[BG5150]

Can we change employer contribution matches based on hours worked?

For example, employees with 20-30 hours per week get no match

30-35 get a 3% match

36+ get a 3% employer contribution and a 3% match

I don't believe that you can require more than 1000 hours to get a contribution or level of contribution. You are doing that with your formula. If a participant works 20-30 hours a week, they are worked more than 1000 hours.

Even someone who works 20 hrs a week gets 1,000 hours.

Could you word the document as "Those scheduled to work..." and then just have to pass coverage?

[Guest Benny Guy]

Yes, I know they all worked more than 1000 hours and are eligible, my question has nothing to do with the eligibility test. Can we carve out different contribution levels based on hours worked, above and beyond the minimums in the eligibility test.

[shERPA]

I wouldn't. How is this different than saying "part time" employees are excluded from the match. It is an additional service-based requirement that is above and beyond that permitted in 410(a).

[Benefits 101]

I wouldn't. How is this different than saying "part time" employees are excluded from the match. It is an additional service-based requirement that is above and beyond that permitted in 410(a).

Maybe... I read it as (http://www.law.cornell.edu/uscode/text/26/410) as saying "participation" is required. Participation isn't being denied, just added benefits. Let me know if I'm looking at the wrong thing here or if you interpret it differently. I just don't read anything excluding that. Participation isn't being limited, just the extra match. Or maybe we can do the extra match based on "years of eligibility" in the spirit of vesting standards?

[shERPA]

401(k) and 401(m) are mandatorily disaggregated for coverage. This is why you can have something like immediate (k) eligibility and 21/12/1000 for match. If the plan says those under 20 hrs don't get match, they aren't eligible for match. IRS doesn't allow service-based exclusions except what is in 410(a).

[masteff]

What about the "36+" part of the question? Can you have a different level for PS? Or are you saying both match and PS cannot be more restrictive than 1000 hours?