If we have to lay off employees, how would that impact their plan eligibility once rehired?
Generally speaking, employees who are already eligible for the plan at the time of layoff (even if not actively contributing) will be eligible to enter the plan immediately on rehire. They don’t even have to wait until the next plan entry date. For those who have not yet entered the plan before the layoff date, the answer gets more involved. On rehire, they could join the plan on the next scheduled plan entry date, or they may need to complete as much as a year of service, depending on plan terms and the employee’s pre-layoff service. Plan document terms and specifics of each employee’s situation need to be considered; be sure to check with your retirement plan consultant.
Cetera Retirement Plan Specialists is a third-party administrator and may not offer tax, legal or investment advice. Plan sponsors should consult their own tax, legal or investment professionals.