Who must be allowed to participate in your employer's retirement plan?

Generally speaking, if your employer provides a plan that covers your position, you must be permitted to become a participant if you have reached age 21 and have completed 1 year of service. Even if you work part time or seasonally, you cannot be excluded from the plan on the grounds of age or service if you meet this service standard. You must be permitted to begin to participate in the plan no later than the start of the next plan year or 6 months after meeting the requirements of membership, whichever is earlier. You should be aware, however, that your employer may provide one or more plans covering different groups of employees or may exclude certain categories of employees from coverage under any plan. For example, your employer may sponsor one plan for salaried employees and another for union employees, or you may not be within the group that the employer defines as covered by a plan.

ERISA imposes certain other participation rules. They depend on the type of employer for whom you work, the type of plan your employer provides, and your age. For example:

• If you were an older worker when you were hired, you cannot be excluded from participating in the plan on the grounds of age just because you are close to retirement.
• If upon your entry into the plan, your benefit will be immediately fully "vested," or nonforfeitable, the plan can require that you complete 2 years of service before you become eligible to participate in the plan. 401(k) plans, however, cannot require you to complete more than 1 year of service before you become eligible to participate.
• If you work for a tax-exempt educational institution and your plan benefit becomes vested after you earn 1 year of service, the plan can require that you be at least age 26 (instead of age 21) before you can participate in the plan.
• If your employer maintains a SEP, you must be permitted to participate if you have performed services for the employer in 3 of the immediately preceding 5 years.