Different match formulas for part-time and full-time employees?

[Guest MES]

I know part-time employees may not be excluded from participation in a 401(k)plan. Can an employer provide for different match formulas for part-time and full-time employees? Would this be illegal as non-discriminatory on its face, or would it depend on the outcome of the ACP test? (Most of the part-timers are NHCEs.)

[KJohnson]

In addition to ACP, each level of match would me subject to discrimination testing for current and effective availability under 401(a)(4).

However, if you can pass ACP and 401(a)(4) testing I suppose it would be o.k.

[MWeddell]

I agree with the above post.

The rules about not being able to exclude part-timers entirely regardless of coverage testing results are based on Code Section 410(a). Nothing in your proposed plan design would violate that Code Section, in my opinion.