lkpittman Posted August 15, 2000 Share Posted August 15, 2000 We have a 403(B) client (a nursing association) that would like to exclude a group of employees from participating in voluntary salary deferrals under the 403(B) plan. These employees are called "temporary care-giver" employees and do "normally" work less than 20 hours per week (sometimes they don't work any hours for several weeks, then sometimes more than 20). They are nervous about the "universal availability rule," but it seems clear to me that they may be excluded as a class under 403(B)(12). How can I give them more comfort with their decision to exclude them? Can we "average" out their hours over the course of they year to support a "less than 20 hours per week" determination? I can't seem to find much guidance on this. Thanks. LKP Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted August 16, 2000 Share Posted August 16, 2000 From informal conversations with people at the IRS, it appears that they are as a practical matter using 1,000-hour test, at least for those employees who remain with the employer for the entire year. This amounts to averaging out their hours over the course of a year. However, you would need to do that calculation on a per employee basis, rather than a group basis. Thus, if one employee in that class regularly works 25 hours a week, and one works 10, you cannot avoid coverage of the whole class because on average they work less than 20. Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
lkpittman Posted August 16, 2000 Author Share Posted August 16, 2000 Thanks for your input! I am really pulling my hair out trying to find some guidance on this one! Attorney suggested looking at pre-ERISA explanation/guidance, since the "normally 20 hours per week" rule stems from that era. I am having difficulty finding any pre-ERISA guidance in this "up-to-the-minute" computer age . . . . LKP Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted August 16, 2000 Share Posted August 16, 2000 Tell me about it! Most of my work is with governmental plans. And in a whole lot of areas, governmental plans are subject to pre-ERISA law. Managing to go back and research that law at this stage (much less apply it to a world that's changed a lot since 1974) is one of the challenges of my profession! Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
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