LTPT question

Client plan excludes those "scheduled to work <1000 hours" which we know has to change.  They amended their plan effective 1/1/2021 for this change so they stopped enrolling that part-time class since 2021.  The plan's normal eligibility is 3-month wait with quarterly entry dates.  

If a part-time person was hired say March 1 2021, their 3-year anniversary would be 3/1/2024.  I assume they would enter the plan for deferrals assuming they completed 500 hours in each of their 3 anniversary years.  (There is no plan year shift since there is not a Year of Service eligibility requirement.)  

I think they should amend and eliminate the part-time class exclusion now to avoid missed eligibility.  They can still exclude LTPT from the match.  They included the part0teim exclusion back for 2021 to avoid the match for these people and to try to stay under 100 lives (They have been subject to audit since they so this is a non issue now.) Does that make sense to eliminate the class exclusion?

One last thing - I believe I read that this part-time exclusion needed to be amended out of plans by Jan 1, 2024 yet the SECURE amendments are not due until end of 2025.  Did I see that correctly?  Maybe the writer meant in practice, but not in document.

Thank you in advance for any comments!

Tom

On 12/15/2023 at 7:12 AM, Tom said:

I think they should amend and eliminate the part-time class exclusion now to avoid missed eligibility.  They can still exclude LTPT from the match.  

Are you suggesting they remove the class exclusion for both deferrals and match? If so, those working <1000 hours will be eligible to receive the match once they meet the 3 month eligibility condition and reach their entry date.  If participants become eligible for deferrals and match under the 3 month elapsed time rules, they are not LTPTs. 

If you are suggesting they amend to allow all employees to defer after 3 months elapsed time and keep the 1000 requirement for match (e.g. dual eligibility or allocation conditions), then I think you have to test the plan as you would any other plan with dual eligibility or allocation conditions.