Otherwise excludable employees for ADP testing

[30Rock]

When determining the non-statutory otherwise excludable employee group, can you use the elapsed time method for computing the 1 year of service requirement? For example, a 401k plan has a 6 month eligiblity period using elapsed time. It is difficult for the employer to track hours. When determining the non-statutory group, instead of using 1000 hours, can you use elapsed time and age 21?

Thanks!

[BG5150]

How does the plan define a year of service?

[30Rock]

The plan uses 6 months elapsed time for eligibility, This does not address the otherwise excludable issue.

Thanks!

[30Rock]

_{Does anyone have any additional comments to share?}

[ETA Consulting LLC]

That is still the question. Even though the plan does not require a year of service for eligibility, the plan still has a definition of what a year of service is. This is what you would use.

Good Luck!

[30Rock]

Ok I get it!

Thanks!

[30Rock]

^{Unfortunately, I am back. A colleague has forwarded this link to me from 2008}

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[MWeddell]

I think you may measure whether a participant has a year of service using either the elapsed time or the hours of service method. The regulations are not very specific regarding how one determines who is in the otherwise excludable group.

This is the sort of issue that the ERISA Outline Book covers well, so you should check that resource if you have an subscription to it.

[BG5150]

Like many things here, the plan document often has the answer. How does the plan define a Year of Service?

[30Rock]

Yes I do have EOB and it does not specify the options.

Thanks!