Medical Pension Services

While we previously provided a brief summary of the new rules, a reminder with a few more details may be helpful as the enrollment date for eligible LTPT employees is near.


  • If your plan requires fewer than 500 hours to become eligible, your plan will generally not have LTPT employees.
    • Example 1: A plan that has a 90-day waiting period (no hourly requirement) will not have LTPT employees. Part-time employees who become eligible are not LTPT and must be included in employer contributions as the plan document may provide and also included in discrimination testing.
  • An employee is an LTPT employee provided they worked at least 500 hours in 3 consecutive years and attained the plan’s age requirement by the last day of the determination period. Service prior to 2021 is excluded for this purpose. Most plans shift eligibility from the first anniversary year to plan year.
    • Example 2: Employee is hired 11/1/2021 and works 500 hours. Year 1 is the anniversary year ended 11/1/2022; Year 2 is the plan year ended 12/31/2022; Year 3 is the plan year ending 12/31/2023. This employee is then an LTPT employee and would be eligible 1/1/2024 provided the age requirement has been met as of 12/31/2023.
  • Plans may no longer exclude categories of employees from plan participation that have the effect of imposing an age or service requirement. Thus, plans may no longer exclude categories of employees such as part-time, seasonal, temporary, or interns as service is a characteristic of these groups. Plan documents often describe such exclusions as “those scheduled to work less than 1,000 hours.”
    • Plans may exclude collective bargaining, non-resident alien, and other employees based on nonservice characteristics such as division, location, and job position (limited to minimum coverage testing.)
  • Other rules:
    • If the employee in Example 2 is not employed as of 1/1/2024, he/she will become immediately eligible upon rehire.
    • LTPT employees are not required to receive any employer contribution, including the top-heavy minimum, and are excluded from discrimination testing. However, LTPT plan balances are included in the determination of the plan’s top-heavy status.
    • If an employer contribution is provided to an LTPT employee, a year of service for vesting requires 500 hours (instead of the plan’s likely 1,000-hour requirement) and years prior to 2021 are excluded. If the LTPT employee later becomes a former LTPT employee, a year of vesting service continues to require only 500 hours.
    • An LTPT employee becomes a former LTPT employee should he/she complete the plan’s regular eligibility requirement, such as, completion of a Year of Service (1,000 hours worked). The former LTPT employee then is generally eligible for employer contributions and included in discrimination testing. That person will never again be considered LTPT regardless of hours worked in the future.