Reminder: Certain Employees Eligible for Salary Deferrals

Long-time part-time workers permitted to make elective deferrals under the SECURE Act.
 

In September 2020, the IRS released Notice 2020-68 to provide guidance on several provisions of the SECURE Act, which was signed into law on December 20, 2019. One such provision requires 401(k) plans to permit employees who have worked at least 500 hours in each of the preceding, consecutive three 12-month periods to make elective deferrals for plan years beginning on or after January 1, 2021.

Even though plans can disregard years of part-time service prior to January 1, 2021, for the purpose of elective deferral eligibility, all service with the employer (even part-time service prior to January 1, 2021) must be considered when determining a participant's vesting service.

Please contact your local Mutual of America representative with any questions regarding salary deferrals for long-time part-time workers.

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