Retirement Topics - Who Can Participate in a Qualified Plan?
In general, employees must be in their employer’s qualified plan (for example, profit-sharing, 401(k) or defined benefit plan) if they are:
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At least age 21 and
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Have at least 1 year of service
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a plan other than a 401(k) plan can require an employee to accrue 2 years of service, but if it does, then the employee is immediately vested in their accrued benefit)
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The employer must follow the eligibility rules in the plan document, which can be less restrictive than those listed above.
Example: Employer B’s plan allows employees to participate in its profit-sharing plan at age 18.
Employees should review the Summary Plan Description that their employer gives to them to determine the eligibility requirements for their plan.
Additional Resources:
Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
Publication 4222, 401(k) Plans for Small Businesses
Publication 4531, 401(k) Plan Checklist
Page Last Reviewed or Updated: 2013-04-03
