The IRS issued guidance for 403(b) plan sponsors on the SECURE 2.0 rule requiring long-term/part-time (LT/PT) employees to be allowed to make voluntary contributions to the 403(b) plan. Notice 2024-73 is in a Q&A format and covers topics related to excluding certain employees and non-discrimination rules.
The Notice confirms that 403(b) plans may continue to exclude student employees, even if they meet the LT/PT requirements. In addition, 403(b) plans can exclude part-time employees who do not meet the LT/PT requirements but must allow employees who do meet the requirements.
Finally, it clarifies that LT/PT employees may be excluded from certain non-discrimination testing. However, if an employee becomes eligible for the plan for a reason other than the LT/PT rules, they must be included in nonelective or matching contributions and must be included in non-discrimination testing.
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