Together, the SECURE Act and the SECURE 2.0 Act require employers to offer employees who work at least 500 hours within three (reduced to two beginning January 1, 2025) consecutive 12-month periods an opportunity to make elective deferrals to their 401(k) and, beginning in 2025, their 403(b) plans. In doing so, the new rule raises numerous questions about how the new service requirement should be tracked. This includes questions about what 12-consecutive month period (often referred to as a “computation period”) employers should use to determine if an employee has completed the requisite service to begin participating in the plan.
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