When setting up a new 401(k) plan, you have the option to include a service requirement, which will dictate how long employees must work for your business before being eligible to enroll in the plan. However, you can waive the service requirement with a “special entry” provision for existing employees, allowing even those who wouldn’t typically be eligible, to enroll as of the plan start date.
For example, you may choose to have a 3-month service requirement for employees who are hired after your plan’s start date, but 0 months of service for all current employees or anyone hired before the plan begins.
Can I remove a special entry provision from my plan?
If you previously elected to have special entry, the provision can be removed from your plan before the start date. The plan’s trustee will need to sign off on the change via a task within their sponsor dashboard.
Depending on the timing of the change, invite emails may have already been sent. It will be up to you to communicate this change with any employees that would have been eligible, but who no longer are due to the removal of special entry. Guideline does not send notices for this amendment.
Once the plan begins and those employees meet the service requirement of the plan, they will be reinvited.
After the plan start date has passed, the employees will be eligible to participate in the plan and the special entry cannot be removed.
Can I add a special entry provision to my plan?
If you previously elected not to include special entry in your plan design, you can choose to add it before the plan start date. However, because all eligible employees must receive applicable notifications about the 401(k) plan at least 30-days prior, the plan’s start date may need to be pushed out. The new date will be delayed to allow for the 30-day notices to be sent to the newly eligible employees.
How do I request a change to the special entry provision?
If you have a dedicated Onboarding Specialist, you can email them directly to add or remove the special entry provision. If you do not have a dedicated Onboarding representative, you can email onboarding-help@guideline.com. Once the change is made, a task will appear on the plan Trustee’s dashboard, which will need to be approved.