BG5150 Posted May 1, 2023 Posted May 1, 2023 Fact Pattern: 403(b Plan EXCLUDES employees who normally work less than 20 hours a week. Employee was working full time for a few years and now is on an abbreviated schedule of 15 hours a week. Question: Does this person continue as a participant in the plan? Or are they now no longer a participant because they are in an excluded class? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Carol V. Calhoun Posted May 1, 2023 Posted May 1, 2023 They must be permitted to continue in the plan under the "once-in-always-in" rule of Notice 2018-95. Bill Presson, Bri and Belgarath 3 Employee benefits legal resource site 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.
BG5150 Posted May 1, 2023 Author Posted May 1, 2023 Thanks. That's what I thought, but I was tripped up with the universal eligibility aspect. To me, like in a 401(k) plan, if someone moves to an excluded class, they are no longer eligible to participate. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Carol V. Calhoun Posted May 2, 2023 Posted May 2, 2023 18 hours ago, BG5150 said: Thanks. That's what I thought, but I was tripped up with the universal eligibility aspect. To me, like in a 401(k) plan, if someone moves to an excluded class, they are no longer eligible to participate. However, an excluded class in a 401(k) plan cannot be defined with reference to age or service. So for example a part-time employee who moves to full-time and then back to part-time, but accumulates a year of service in between, remains eligible for the 401(k) plan. This is pretty much the same as the rule for a 403(b) plan. This contrasts with a situation in which someone moves into a different class of employee. For example, if a plan covers only salaried employees, an hourly employee who becomes salaried and then reverts to being hourly would lose eligibility. Paul I 1 Employee benefits legal resource site 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.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now