Nondiscrimination for eligibilty under 1.125-7(b)(1)

[Belgarath]

So have I got this right - probably not...

POP plan has salaried qualify after 1 month of service, and hourly after 3 months of service. Since the eligibility to participate for "that plan year" has everyone being eligible, does that mean it passes the reasonable classification? Or am I misunderstanding, and each "sub-class" must pass the safe harbor or the unsafe harbor test?

Edit - Well, they wouldn't necessarily ALL be eligible for the Plan Year, if they were hired quite late in the plan year. So I suppose that you would have to do the safe/unsafe harbor testing, which normally would pass with flying colors anyway.

[KJohnson]

See 125 (g)(3) employment requirement for each employee must be the same...

(3)Certain participation eligibility rules not treated as discriminatory. For purposes of subparagraph (A) of subsection (b)(1), a classification shall not be treated as discriminatory if the plan—

(A) benefits a group of employees described in section 410(b)(2)(A)(i), and

(B)meets the requirements of clauses (i) and (ii):

(i)No employee is required to complete more than 3 years of employment with the employer or employers maintaining the plan as a condition of participation in the plan, and the employment requirement for each employee is the same.

(ii)Any employee who has satisfied the employment requirement of clause (i) and who is otherwise entitled to participate in the plan commences participation no later than the first day of the first plan year beginning after the date the employment requirement was satisfied unless the employee was separated from service before the first day of that plan year.

[Belgarath]

Right, so you have to actually do the testing in this situation. Thanks for responding.