Under the SECURE Act and the SECURE 2.0 Act, employers must provide long-term, part-time employees – i.e., employees who complete at least 500 hours of service in three consecutive years (reduced to two years in 2025) and are at least 21 years old – the opportunity to make elective deferrals under their 401(k) plans and, beginning in 2025, their 403(b) plans. However, long-term, part-time employees are not required to be eligible for employer matching or profit-sharing contributions until they satisfy the regular plan rules. Despite this fact, one of the most salient issues surrounding the implementation of the new rule is how it impacts – and complicates – tracking when employees become vested in such contributions.
When It Comes to Vesting, IRS Says Once a Long-Term, Part-Time Employee, Always a Long-Term, Part-Time Employee
Posted In Employee Benefits, Retirement Plans