If new temporary employees are hired to supplement employer's workforce during the COVID-19 emergency, when are they eligible to participate in our retirement plan?
Plan terms will govern this. These situations require paying close attention because many simplified documents provided by payroll companies have very liberal eligibility/entry provisions. Review 401k plan provisions now to avoid unexpected surprises later, as these provisions may impact compliance testing and contribution requirements. In addition, the employee notification/disclosure regime hasn’t been modified yet to account for the coronavirus-related challenges. The retirement plan industry has requested that the DOL provide temporary relief from ERISA disclosure and notice requirements. None has been provided as of April 13.
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.