Egtra updating plan documents
You should be aware, however, that your employer may provide one or more plans covering different groups of employees or may exclude certain categories of employees from coverage under any plan.For example, your employer may sponsor one plan for salaried employees and another for union employees, or you may not be within the group that the employer defines as covered by a plan. They depend on the type of employer for whom you work, the type of plan your employer provides, and your age.
Many web-based 401(k) plans will run on administration and recordkeeping platforms that plan providers will outsource to 401k specialists and 401k Application Service Providers (ASP).Refer to your summary plan description to see which method is used by your plan.Generally speaking, if your employer provides a plan that covers your position, you must be permitted to become a participant if you have reached age 21 and have completed 1 year of service.Even if you work part-time or seasonally, you cannot be excluded from the plan on the grounds of age or service if you meet this service standard.You must be permitted to begin to participate in the plan no later than the start of the next plan year or 6 months after meeting the requirements of membership, whichever is earlier.ERISA establishes rules for how employers must measure employees' employment service to determine how the eligibility, benefit accrual, and vesting rules apply.
ARISE generally defines a year of service as 1,000 hours of service during a 12-month period.
Different rules apply to counting service for purposes of eligibility, benefit accrual, and vesting.
A plan basically has a choice among three methods for determining whether you must be credited with a year of service for participation, vesting, and, in some circumstances, benefit accrual: the general method of counting service, a simplified equivalency method, or the elapsed time method.
The advantages of web-based online 401(k) plans are obvious to today's workers, and include use conveniences, real-time monitoring and reporting, and instant re-allocation of their retirement assets.
The internet has also dramatically reduce the cost of 401(k) plan administration, saving plan sponsor 50% or more in ongoing fees and costs when compared to the older traditional labor-intensive plans.
Outsourcing of 401(k) functions by plan providers will extend the trend towards lower cost, high-quality 401(k) products.