401K
gregoryscott
10 Posts
[font size="1" color="#FF0000"]LAST EDITED ON 08-10-05 AT 09:11AM (CST)[/font][br][br]Our company policy states that only full-time EEs may participate in our 401k program. They become eligible after their first 90 days. We define "full-time" as 30 or more hours per week.
Last January, we hired a part-time employee who was intended to work no more than 25 hours per week. However, I recently learned that this person's manager has been scheduling and working this EE for over 30 hours per week for the last 3 months.
This employee is now requesting to be added to our 401k. The manager however, wants to reduce this EE back down to 25 hours per week max.
How do the regs address this situation? Are we required to add this person to our 401K program even if his hours are dropped back down below the threshold?
Last January, we hired a part-time employee who was intended to work no more than 25 hours per week. However, I recently learned that this person's manager has been scheduling and working this EE for over 30 hours per week for the last 3 months.
This employee is now requesting to be added to our 401k. The manager however, wants to reduce this EE back down to 25 hours per week max.
How do the regs address this situation? Are we required to add this person to our 401K program even if his hours are dropped back down below the threshold?
Comments
I remember things like 1,000 hours of service is required during 12 months for a year to "vest" for an EE. This is slightly less than a 20 hour week.
For benefits eligibility, there are a number of weeks during a period which the EE must work more than your 30 hours minimum, before the is considered to meet the full time definition. It is somehting like 20 - 26 weeks during a __ week period.
Sorry I can't do better than than off the top. The IRS rules and ERISA rules governing 401k plans are voluminous and twisty. That's why I suggest calling an expert.
We just rewrote our Plan Document, and were informed that we can't make a differentiation for eligible participation based on number of hours worked. Our criteria are now 1) at least age 21, 2) six months' service. And the company has gotten technical on us, too: if a new employee works one hour in a week, that week is counted as a service week (this is part of the Service Spanning Rule - from IRS regs?).
We supposedly can specify that whole classifications of employees are not eligible, such as "all office workers" or "all Maintenance Department personnel," or even "all non-exempt employees," but we never wanted to run up against a discrimination charge that this might engender, under all that IRS compliance testing.
I'll point out our health/dental insurance and flex spending accounts are different - the insurance companies dictate who is eligible based on PT/FT status. But we had to throw that concept out the window for our retirement.
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Correct me if I am wrong, but I do not believe the company has the option of offering 401(k) to only "full time" employees.