Friday, December 18, 2020

Are you ready to comply with broadened eligibility requirements?

As a plan sponsor, you’re required to ensure all eligible employees can participate in the plan.

The SECURE (Setting Every Community Up for Retirement Enhancement) Act recently broadened 401(k) plan eligibility requirements to include long-term part-time employees for plan years beginning January 1, 2021. Employees who are 21 and older who work at least 500 hours in three consecutive 12-month periods can participate in the plan.

We can help ensure your records are accurate for the first employees to benefit from this change in 2024. All you have to do, if you’re not doing so already, is make sure to submit payroll information, including hours, for all employees regardless of how many hours you expect them to work. With this information, we’ll track when they’re eligible to participate in the plan under the new rules.