less than 1000 hour employee

[mjf06241972]

I have a new plan for 2018 that is a safe harbor match. 

Owners spouse contributed to 401k but worked only 300 hours. 

The plan is based on a full year with an effective date of 1/1/18. 

If they want to do profit sharing, can they exclude her to keep the other non-key employees who worked less than 1000 hours from getting psp?

[CBenefits]

Does Plan Document allow everyone to be eligible upon effective date or did she work 1000 hours in the Past to become eligible to defer 401(k)?

[Mr Bagwell]

The plan document already dictates the allocation requirements.  What does the plan doc say?

Profit sharing may bring unnecessary top heavy requirements.  Be aware.

[mjf06241972]

Spouse never worked more than 1000 hours.  Plan will be top heavy as Owner put in max 4k.  Plan Document does not say everyone elgiible as of start of plan.  it uses standard 1 year, 1/1 or 7/1 and 1000 hours.

[Bri]

How'd she get eligible in the first place?

[CBenefits]

That's what I was thinking. Maybe amend Plan for 2019 to allow her in Plan and return her 401(k) for 2018.

Would also think some employees would be subject to Top Heavy Minimum if Owner is receiving Profit Sharing and Plan is Top Heavy as you have indicated. 

[Lou S.]

Does plan use hours of service or elapsed time for eligibility?

Are you sure Spouse never had a year of service prior to this year?

Can you return the spouse deferral and forfeit match under EPCRS for 2018?

If you amend the plan to bring her in, how many other short service employees would that bring in? and what kind of QNEC would be required for them? can that QNEC be used to satisfy TH min?

If Plan is TH - any non key eligible will be eligible for TH min.