Cite prohibiting 2000 Hours of Service for benefit accrual?

[Flyboyjohn]

Instead of the typical 1,000 hours of service condition on receiving the company matching contribution the employer wants to require 2,000 hours.

I'm confident it can't be done (even if the match can pass coverage) but can't put my finger on a cite, anybody know where to look?

[Doghouse]

I think what you're looking for DOL Reg. 2530.200b-1(b).

[QDROphile]

The IRS might assert that the provision effectively causes a violation of section 410(a). Section 410(a) involves standards for participation in the plan, but one cannot participate effectively in the plan if one cannot accrue a benefit. Any exclusion based on minimum service is going to rub the wrong way.

[Flyboyjohn]

Thanks Doghouse I was poking around in 410 and forgot about DOL Regs.

Thanks QDROphile I agree that such a provision is effectively a 410(a) violation.

[austin3515]

I actually don't think it is an IRS violation to require 2,000 hours of service each year to receive an allocation of the match, I think it is just the DOL. (mind you, requiring 2000 hours for initial eligibility would violate 410a)

A good analogy to my observation I suppose would be to also indicate that if you cheated on your taxes it would be the IRS who you should watch out for and not the DOL. You should not cheat on your taxes, nor should you require 2,000 hours each year to receive the match.

Pointless observation...

[Flyboyjohn]

Couldn't IRS argue that having a 2000 hour condition for annual match is functionally the same as requiring 2000 hours for match eligibility?