Spectrum Resource Center

Advice, Articles, Events, Insights, News, Newsletters, Opinions, Press Releases, Updates, and More from Spectrum.


SECURE 2.0 Implementation Considerations for Long-Term Part-Time Employees

The SECURE 2.0 Act continues to broaden access for American workers to save for retirement through their workplace retirement plan. One of the Act’s mandatory provisions focuses on expanding eligibility to long-term part-time employees. These employees are those who, in each of the last three consecutive years (long-term), worked at least 500 but less than 999 hours (part-time).

  As a result:

  • Effective in 2024, 401(k) plans must allow long-term part-time employees to contribute to a 401(k) Plan.
  • Effective in 2025, eligibility wait time for long-term part-time employees is shortened from three consecutive years to two years if the employee is at least 21 years of age (eligibility and vesting service prior to 2023 are excluded).

While this development is positive in terms of helping many more employees save for retirement and increasing retirement readiness for American workers, it also increases the administrative burden on plan sponsors.

This has been a recent talking point with plan sponsor clients for Chris Waldron, Retirement Consultant, from ABG member, Spectrum Pension Consultants. Following is an overview of the considerations Chris points out that are key in understanding the implementation and impact of this long-term part-time employee provision.

What Has Changed & How Employers Need To Prepare

Historically, in many industries with part-time workers and higher turnover, such as the restaurant industry, it was common practice by employers, with the administrative burden in mind, to exclude part-time employees from retirement plan programs. As greater focus has been placed on helping more American workers save for retirement, this exclusion is no longer the case, and plan sponsors should work with their service providers, including ABG, to review their employee records, plan design, and recordkeeping system capabilities to ensure readiness for these new rules. Importantly, plan sponsors need to keep up-to-date records of all part-time and full-time employees and share this data with their recordkeeper and payroll provider.

  • For larger businesses with efficient employee data systems in place, this may be less of an administrative lift. Reports can be easily run that identify the long-term part-time employee population that now needs to be served by access to the companies’ retirement plan.
  • For smaller businesses that make up a significant portion of the American economy, long-term part-time employee identification and the tracking of time worked and eligibility may not be as straightforward, particularly for regularly returning seasonal employees or company interns, if employment records are not as easily retrieved. There may be much more to organize before the January 1, 2024 implementation deadline.

A Proactive Approach Is Key

As Chris points out, what needs to happen is an enrollment offering for this now eligible long-term part-time employee segment.

  • The reality is that unless there is a finite time established for an employee’s period of work in a company, many part-time employees may now be considered potential long-term part-time employees.
  • Some plan sponsors may not fully understand this, and retroactively, there may be issues in future audits if this population has not been served via the offering of retirement plan participation.

Employers need to now work from the assumption that that employee, even if they just work for the summer, could potentially be a long-term part-time employee. They may not end up being a long-term part-time employee, but they have to be treated as if they might be. The burden is on the employer to keep accurate records and provide ready retirement plan access.

  • Plan sponsors should evaluate whether changes are needed to their plan documents or administration to comply with this long-term part-time provision.
  • In addition, some plans may now end up in the larger employer Form 5500 reporting category in 2024 or later due to the participation of this newly included employee segment. As a result, they may also need an independent plan audit for the first time.

Spectrum Is Here To Help

Coordinating with retirement plan providers such as Spectrum and payroll providers to keep accurate records and effectively implement this new provision will be key. Undoubtedly, because this is a significant change for plan sponsors and their long-term part-time employee base, there will be administrative issues to work through. Also, additional guidance from the Department of Labor and IRS is still needed to provide more details regarding implementing the long-term part-time employee rules as we move forward.

As Chris notes, “While this is a positive retirement savings development for many American workers, there will be administrative issues to work through. Having knowledgeable retirement plan providers that can help plan sponsors move forward effectively is key.”

Please contact your local Spectrum representative with any questions regarding this long-term part-time employee provision.

blog comments powered by Disqus


401k loan participant loan investing margin professional plan design practice defined benefit pension fees dol retirement readiness documents compliance spectrum open golf pano cancer event tournament philanthropy fiduciary rule tax cuts press release bi cloud technology azure plan intelligence docusign microsoft myretirement limits irs retirement plan contribution asset allocation investments newsletter cybersecurity plan termination merger acquisition gender retirement gap lifetime income investment returns women men erisa defined contribution financial wellness employees financial stress plan faq participant questions payroll finwell plan education fis impact award technology innovation education entreprenuers business accumulation startup wealth ira charity millennials 40th anniversary celebration soc-1 automation recordkeeping case study portal fiduciary tax deduction enrollment escalation video automatic qdia qualified default investment alternative roth participant outcomes uncashed checks distributions debt credit saving cash balance cbpp safe harbor nondiscrimination adp acp top-heavy plan sponsor 3(16) hardship withdrawal forfeiture forfeit vested vesting owner audit bond bundled unbundled psoy plan sponsor of the year abg mfa consulting employer connect reports student loans db/dc providers services guide erisawrap welfare benefit plan fundraiser document cancer reserach retirement confidence wrap spd wrap document plan document welfare benefits employee benefits healthcare wrap unvested vested account balance spectrumopen spd wrapspd spectrumplatform market volatility participant behavior socially responsible esg plan participation secureact SECURE legislation secureact2019 secureactof2019 secure act secure act of 2019 qaca participation restate restatement erisa bond fidelity bond bonding goals plan amendment election 2020 coronavirus covid-19 business continuity cares act cares covid19 relief retirement plan relief the cares act workforce demographics older employees covid the secure act engagement SECURE 2.0 Act Retirement Plan Legislation 401(k)

ERISA Workplace Retirement Plan Limits

The federal government annually publishes updated qualified retirement plan limits, which impact the contributions, benefit accruals, and compliance of ERISA covered qualified retirement plans. The below tables summarize the most significant changes in recent history.


Keep up on our evolving products, services, solutions, and technology through our Newsletters.

About Our Firm

Spectrum is a B2B consulting firm, which enables American Workers to plan and save towards a dignified financial future by designing, administering, and operating the ranges of retirement and financial plans for U.S. employers.

Get in touch

  • Address: 6402 19th Street, Tacoma, WA 98466, USA

  • Phone: +1 (253) 565-2100

  • Email: Contact Us Form