QOTW: LTPT Eligibility SECURE 1&2

Sponsored by MFS Investment Management. 

SECURE 1.0 passed in 2019 included a provision requiring plans to allow LTPT employees (those that work more than 500 hours in a year for three consecutive years) to participate in the plan. SECURE 2.0 reduced that three years of consecutive employment to two. This week we asked members if they made changes to the plan to comply with SECURE 1 and if further changes were required for SECURE 2.0.

The majority of plan sponsors stated that part-time employees were already allowed to participate. For those that did need to make changes, most allowed all part-time employees to participate and thus do not have to track hours or make further changes to comply with SECURE 2.0.

Comments follow: 

• 6 month waiting period, same as full-time employees
• All employees are available 1st day on deferrals, need to be with us 1 Year for ER contribution. We also have SCA employees on government contracts as well. We have a 403(b) plan and need to make non voluntary ER contributions to that plan as well if the employee waves the medical. Any suggestions on language to amend the plan?
• All employees are eligible to contribute, with the exception for temporary employees who are not eligible.
• All employees were made eligible but after 3 months of service so no tracking of hours is required
• All of our employees are eligible to participate in our plan immediately upon hire.
• It is a great retention feature for our part-time employee's retirements.
• Our company does not employee anyone on a basis other than Full-Time, so this is N/A
• Our only missing group were our interns. Modified to allow any intern over 21 to contribute to the plan in a non-employer matching capacity. Even allowing our summer interns to participate.
• Our plan has always included part-time employees as eligible participants for all contribution types, however, we do have a 1,000 hour requirement for discretionary profit sharing contributions.
• We already allow PT Regular employees to participate, but not temps on our payroll. Going forward, we will do a three-year lookback for employees classified as temporary.
• We amended our plan to allow all employees, unless excluded by a CBA, the opportunity to participate without matching contributions. The match eligibility requirements did not change.
• We do not match until the previous eligibility criteria  (service and hours) have been met.
• We have no employees that meet the LTPT criteria
• Where this could be a factor for us is do we want to adopt this provision for match eligibility as well. I realize that is not required under 2.0 but it feels like something we should consider.