If my new company will have full-time employees, is the company required to offer each full-time employee the right to participate in the company's new 401(k) Plan?
Yes. In fact, under ERISA law, all employees of the company must be allowed to roll money into the Plan and must be given the same investment options. Internal Revenue Code Section 401(a)(4) provides that, under a qualified retirement plan, contributions or benefits provided under the plan must not discriminate in favor of highly compensated employees (HCEs). As a result, it is imperative that all employees of the new benefits are notified of the new 401(k) Plan and provided with the same contribution and investment options.
Please contact one of our IRA Experts at 800-472-0646 for more information.