On December 20, 2019, the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) was signed into law. The SECURE Act implements new rules for creating and maintaining retirement plans. Plan sponsors should consider and plan for the impact of these new rules to ensure timely compliance.

New 401(k) Eligibility Requirement for Long-Term Part-Time Employees -

Before the SECURE Act, employers could generally exclude part-time employees (i.e., employees who work less than 1,000 hours per year) from their 401(k) plans. However, starting in 2021, the new rules will require most employers maintaining a 401(k) plan to maintain dual eligibility requirements for part-time employees. Part-time employees must be allowed to enter the 401(k) upon completing either a one-yearof-service requirement (with the 1,000-hour rule), or at least 500 hours of service for at least three consecutive years (beginning in 2021) and attaining age 21 at the end of three year period (“Long-Term Part-Time Employees”). Long-Term Part-Time Employees are only required to be eligible to make deferral contributions under a 401(k). However, employers may also allow Long-Term Part-Time Employees to participate in employer matching and non-elective contributions.