The SECURE Act offers many opportunities foremployers to assist their employees with retirement savings. As themost impactful retirement plan legislation since the PensionProtection Act of 2006, the SECURE Act increases access todefined-contribution plans, promotes lifetime income options, andfacilitates retirement plan design and administration.

Changes to 401(k) plan eligibility for certain longer-service,part-time employees

The SECURE Act requires 401(k) plans to extendparticipation—solely for purposes of making elective deferrals—toany part-time employee who has worked at least 500 hours in each ofthe immediately preceding three consecutive 12‑month periods.Matching or other types of employer contributions are not requiredto be made to these part-time employees, and testing relief wouldbe provided to ensure that extending participation to thesepart-time employees does not adversely affect nondiscriminationtesting. These changes are effective for plan years beginning afterDecember 31, 2020, but hours of service during 12-month periodsbeginning before 2021 are not taken into account:

• 401(k) plans that currently exclude part-time employees willneed to be amended to incorporate these new eligibility rules.
• Calendar-year 401(k) plans will need to accommodate the neweligibility rules beginning January 1, 2021. However, because the12-month periods for purposes of counting the 500-hour requirementare not counted before 2021, the counting of service (for purposesof the 500-hour requirement) will begin but actual eligibility willbe delayed.