'cutback' for increased eligibility provision?

Plan has a 1- month of service eligibility provision.

They are increasing that eligibility provision up to 1- year as of first day of next plan year.

I believe then, anyone hired within one month (ie from 12/2-12/31 of a calendar plan year) before the eligibility change would be required to wait for the full year, since not being participants, plan rules don't yet apply.

Agreed.

Are they considering waiving that requirement for anyone employed on 1/1? I see that sometimes to catch the December people you describe and have it only apply to those hired after 1/1/2024.

6 minutes ago, Bill Presson said:

Are they considering waiving that requirement for anyone employed on 1/1? I see that sometimes to catch the December people you describe and have it only apply to those hired after 1/1/2024.

No they are not.

This applies by the way only to ER contributions. So actually someone who was hired during December will enter the plan in January for 401(k), but still wait for the full year for ER eligibility.

fwiw - plan has never made an ER contribution.

Eligibility is not a protected benefit but you can grandfather it for folks who already met the old eligibility but not the new, or for folks employed as of a certain date.

As long as it's not discriminatory, like bringing in the just the owners kid or a newly hire partner to the firm you have a lot of flexibility, it all depends on how the amendment language is drafted.

On 12/29/2023 at 12:44 PM, TPApril said:

No they are not.

This applies by the way only to ER contributions. So actually someone who was hired during December will enter the plan in January for 401(k), but still wait for the full year for ER eligibility.

fwiw - plan has never made an ER contribution.

Just be wary of the top heavy provisions, if applicable