Mary Beth’s Corner

Long-Term, Part-Time Employee Rules — What You Need To Know!

Administration, ERISA Services, New Mandates
December 26, 2023

The Setting Every Community Up for Retirement Enhancement (“SECURE”) Act of 2019 requires that 401(k) plans permit employees who have worked for at least 500 hours of service over three consecutive years and attained age 21 before the close of those three years must be allowed to defer into their company offered 401(k) plan. These employees are classified as “Long-Term Part-Time Employees (“LTPTs”).

Utilize 'My Benefits' for Your Benefit

Below are a few materials we have sent out to our plan sponsors to help support each retirement plan and its participants.

Long-Term Part-Time Employees Summary – this brochure provides a high-level overview of the LTPT rules.
Long-Term Part-Time Employees Reference Guide – this reference guide provides detailed explanations and examples regarding the LTPT rules.
Long-Term Part-Time Supplemental Notice –this supplemental notice should be included with the annual notice and SPD that you provide to your employees going forward. The notice indicates that LTPT employees are not eligible for the plan’s automatic enrollment provisions. If your plan does not have an automatic enrollment provision or is subject to the automatic enrollment rules outlined in the Reference Guide, you will need to remove the language accordingly.

We Are Here To Help!

The rules within the retirement plan industry can be complex, sometimes overwhelming and always ever-changing, but you don’t have to navigate them alone. Our team of experienced retirement plan experts is here to assist you every step of the way.

We hope the materials mentioned above offer some administrative assistance and if not, please reach out to us with any and all questions!