Tom Posted October 10, 2023 Posted October 10, 2023 So some advise eliminating a waiting period or making it very short for part-time deferral-only employees. In the past if the plan was top-heavy they had to get 3%. 90% of our plans are top-heavy. And I know SECURE 2.0 eliminates top-heavy for those otherwise excludable. So if a plan allows all participants entry into the plan say after 12-month wait and entry date, those with a Year of Service (1000 hours) will get a full employer contribution and those without will not - they can defer only. This will satisfy the LTPT requirement. There is no testing on the deferral-only group, and no top-heavy required contribution. This seems pretty easy except it's more enrollment for a plan sponsor. I believe our clients generally will still want the 12-month waiting period. Does this sound reasonable? Also, if it is a DC/DB combo, are there any consequences? I would think not.
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