January 10, 2024

Retirement Plan Updates:

Mandatory Long-Term Part-Time (LTPT) Coverage

Effective January 1, 2024, plan sponsors must allow long-term part-time (LTPT) employees to participate in the plan. A LTPT employee is defined as any employee who works 500-999 hours in 3 consecutive plan years (starting with the 2021 plan year). Any service-based exclusion (e.g., Part-time, Temporary, or Seasonal) categories in your plan document can no longer apply to employees qualifying as LTPT employees.

Any employee who works between 500-999 hours in three consecutive 12-month periods beginning with the 2021 plan year must be offered the opportunity to defer beginning in 2024. Here are some examples:

If you believe you have or might have some employees that would be deemed LTPT employees, some action is needed from you:

• Review for LTPT Employees: We encourage you to review your employee population to ensure employees who meet the hours requirements above are not excluded from your plan. Please review the 2022 Annual Valuation Letter that went with the annual 5500 filing. This identifies any potential participants and when they would be eligible to enter the plan.

• Enroll LTPT Employees: If you have any LTPT employee(s), you will need to make sure they are enrolled in the plan and offered the opportunity to defer effective for the plan year beginning in 2024. Please provide them with a Salary Deferral Election Form and a Beneficiary Designation Form to complete and return to your payroll provider. IMPORTANT: These individuals are only eligible to defer and are not eligible for any employer contributions.

The 2022 Annual Valuation Letter, Salary Deferral Election Form, and Beneficiary Designation Form can be found on your Client Portal.

If you have any questions, please do not hesitate to contact us.

Sincerely,

Professional Business Management