IRS proposes long-term, part-time worker 401(k) eligibility rules 

Proposed IRS regulations would implement the new 401(k) plan eligibility requirements for long-term, part-time (LTPT) workers first established by the Setting Every Community Up for Retirement Enhancement Act of 2019 and modified by the SECURE 2.0 Act of 2022. The regulation would apply to plan years starting on or after Jan. 1, 2024, which the preamble to the proposal says is generally the earliest employees will be eligible to participate in 401(k) plans under the LTPT requirements. Employers can rely on the proposal until IRS issues a final regulation. The proposal doesn’t address ERISA-covered 403(b) plans, which must comply with the LTPT eligibility rules starting in the 2025 plan year. Originally published on Jan. 19, 2024, this updated article includes a discussion of certain plans that could see employees satisfy the LTPT eligibility rules prior to the 2024 plan year, as well as recent informal IRS guidance recommending action steps for employers.

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• Notice 2024-2 (IRS, Dec. 20, 2023)
• Proposed regulation (Federal Register, Nov. 27, 2023)
• Div. T of Pub. L. No. 117-328, the SECURE 2.0 Act of 2022 (Congress, Dec. 29, 2022)
• Division O of Pub. L. No. 116-94, the SECURE Act (Congress, Dec. 20, 2019)

• After empty 2023 RA List, IRS delays amendment deadlines for new laws (Dec. 21, 2023)
• User’s guide to SECURE 2.0 (regularly updated)
• Viewing SECURE 2.0 through a 403(b) lens (May 22, 2023)
• Alert: SECURE 2.0 retirement reforms set to become law (Dec. 20, 2022)
• IRS issues FAQs on SECURE and Bipartisan Miners acts (Sept. 22, 2020)
• SECURE Act set to become law (Dec. 19, 2019)