Under the SECURE Act and the SECURE 2.0 Act, employers must provide long-term, part-time employees the opportunity to make elective deferrals under their 401(k) plans and, beginning in 2025, their 403(b) plans. This new rule is fraught with complexity and has generated numerous questions about how the requirements apply. But in talking about the new rule, we often do so in simpler terms by focusing on the anticipated impact on employees working more than 500 hours (often thought of as the new eligibility threshold) but less than 1,000 hours (often thought of as the old eligibility threshold).
For the most part, that’s fine. In fact, doing so provides a helpful and, in some cases, necessary shorthand for discussing the primary differences between the long-understood old eligibility rule and the more complicated new one. However, because certain special rules apply to employees who enter an employer’s plan as long-term, part-time employees, it is important for all employers to understand when an employee is a long-term, part-time employee.
