Indigestion from Turkey and Stuffing or the IRS’ Proposed LTPT Regulations? | IRS Increases COLA Adjustments for 2024 | Slam Dunk for Prosecutors in NBA Health Care Fraud Win

The November Monthly Minute digs into the new proposed LTPT regulations, 2024 benefit limits, and the NBA health plan fraud verdict.

Indigestion from Turkey and Stuffing or the IRS’ Proposed LTPT Regulations?

Retirement plan professionals were jolted out of their post-Thanksgiving slumber by the IRS’ release of the highly-anticipated proposed long-term, part-time (LTPT) employee regulations. The proposed LTPT regulations reflect statutory changes made by the SECURE Act and SECURE 2.0. As reported in the January 2023 Monthly Minute, employers must allow long-term, part-time workers to participate in 401(k) plans with the result that a part-time employee must complete either 1 year of service (with the 1,000-hour rule) or 3 consecutive years of service (with the 500 hour rule) under the SECURE Act -- which was reduced to 2 years under SECURE 2.0.

Noted below are a few key points of the proposed rules to help guide plan sponsors through the new LTPT landscape:

• The new guidance makes clear that the special rules that apply to LTPT employees apply only to those employees who are eligible to participate in a qualified CODA solely by reason of satisfying the statutory LTPT service requirement. Thus, an employee who becomes eligible to participate in a qualified CODA immediately or by reason of having...

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