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Participant Eligibility Rules - Safe Harbor

These rules define eligibility for receiving either safe harbor non-elective (SHNEC) or safe harbor match contributions (SHMAC). Note: These rules are generally the same as those defined for Plan Participation.

How to Access the Participant Eligibility Screen

On the Setup menu, point to Plans and then click Participant Eligibility Rules. The Participant Eligibility Rules window displays.

How to Define Eligibility Rules for Safe Harbor

1.   Leave Location as -Default-, unless a different set of eligibility rules need to be defined for each location of the Plan. Skip to step 11 to define eligibility rules for a specific location. Otherwise, continue to step 2.

2.   Select Safe Harbor as the Eligibility Type.

3.   The Eligibility Rules Required in the Plan check box is selected and cannot be changed for Safe Harbor.

4.   Select the Use Open Enrollment Date check box to grandfather existing Plan participants if there are amendments to the Plan eligibility requirements. Note: An Open Enrollment Date must be entered first on the Setup>Plans>Plan - Setup tab before selecting this check box. If a date is not entered, the eligibility rules cannot be saved.

5.   Select the Eligibility Requirements:

Age: Enter the minimum age required to participate in the Plan. The default is 0 and the maximum is 21.

Months of Service: Enter the number of months a participant must be employed to be considered eligible to participate in the Plan. The default is 0 and the maximum is 24. Note: The hire date is entered in the Setup>Participants>Employment Dates option.

And/Or: Select "And" if a minimum number of Hours is required in addition to months of service. Select "Or" if a minimum number of Hours is required as an alternative to months of service.

6.   Select Computation Period Method and Hours of Service.

Hours of Service: Enter the number of hours that a participant must complete before he becomes eligible for Plan participation. Hours of service information must be defined in the Setup>Participants>Payroll Detail option.

Choose either Switch to Plan Year or Anniversary Year.

7.   Use Rehire Date for Eligibility: Select this check box to calculate eligibility based on the participant's rehire date, if applicable. If this check box is selected, the Use Break in Service check box must be selected on the Setup>Plans>Plan - Vesting tab and you must define the Setup>Plans>Break in Service Rules.

8.   Select Plan Enrollment Date Rules:

Plan Enrollment Date Start (MM/DD): Enter the Month and Day on which eligible participants will be able to enroll in the Plan. This field is generally set to the first day of the Plan year and is used in conjunction with the Plan Enrollment Date Cycle field and the Enrollment Start Rules options. For example, if a participant is eligible as of 05/24/2007 and you enter 01/01 (with Monthly as the cycle frequency and Enroll Next as the Enrollment Start Rules option), the participant's Eligibility Date will be 06/01/2007.

Plan Enrollment Date Cycle: Select the frequency (Monthly, Quarterly, etc.) in which an eligible participant can enroll. This field is used in conjunction with the Plan Enrollment Start (MM/DD) field and the Enrollment Start Rules options. For example, if a participant is eligible as of 05/24/2007 and you select Monthly (with 01/01 as the Plan Enrollment Start date and Enroll Preceding as the Enrollment Start Rules option), the participant's Eligibility Date will be 05/01/2007.

9.   Select one of the Enrollment Start Rules options: Enroll Next, Enroll Coinciding with or Next, Enroll Preceding, or Enroll Nearest.

For Example, if the Plan is a calendar year Plan with monthly entry and the date, age and service met are on 2/1/2006, the Enrollment Date will be:
Enroll Next: 3/1/2006
Enroll Coinciding With or Next: 2/1/2006
Preceding Enrollment Start: 1/1/2006
Enroll Nearest: 2/1/2006

10.Select the Exclude from Eligibility options, which are used for excluding categories of participants from the Plan.

Management Account: Select this check box to exclude any participants that are flagged as Management Accounting on the Setup>Participants>Participant Plan Other Information - Flags tab.

Segregated Accounting: Select this check box to exclude any participants that are flagged as Segregated Accounting on the Setup>Participants>Participant Plan Other Information - Flags tab.

11.Click the Add icon to access the Select Location and Eligibility Type dialog box to add rules for a specific Location. Repeat Steps 2-11.

Explanation of Fields

Field Name

Field Description

Required / Optional

Location

The field is automatically populated with a -Default- location. Alternatively, a Plan-specific location code can be added to define rules for certain groups of employees or regions. A location can only be added if there are locations defined in the Plan. Note: You can set different eligibility rules for each location in the same Plan.

Optional

Eligibility Type

Select Safe Harbor.

Required, if the Plan allows safe harbor contributions

Eligibility Rules Required in the Plan

For Plan Participation, TSM SmartClient uses this as a default (selected).

Required, if the Plan allows safe harbor contributions

Use Open Enrollment Date

Select this check box for TSM SmartClient to calculate enrollment dates using the open enrollment date. Checking this box requires that an Open Enrollment Date is entered on the Setup > Plans > Plan - Setup tab. If a date is not entered, the eligibility rules cannot be saved. Note: The open enrollment feature allows an employer to grant more liberal eligibility requirements to its current employees than to its future hires.

Optional

Eligibility Requirements: The following fields are used to determine how a participant is deemed eligible for the Plan.

Age

Enter the minimum age required to participate in the Plan.

Required, if the Plan defines a minimum age.

Months of Service

Enter the number of months a participant must be employed, from their date of hire, to be considered eligible to participate in the Plan. The default is 0. Note: The hire date is set in the Setup>Participants> Employment Dates option.

Required, if the Plan defines service as a minimum number of months.

And/Or

Enter "And" when hours are required in addition to months of service. Enter "Or" when hours are required as an alternative to months of service.

Required, if the Plan defines service in terms of hours.

Use Rehire Date for Eligibility

Select this check box for TSM SmartClient to calculate eligibility based on the participant's rehire date, if one exists. If selected, the Use Break in Service check box must be selected on the Setup>Plans>Plan - Vesting tab and the Break in Service Rules must be defined.

Optional

Computation Period Method: These options determine how hours are counted during each period of service.

Hours of Service

Enter the number of hours that a participant must complete before he is eligible for Plan participation. Hours of service information must be defined in the Setup>Participants>Payroll Detail option

Required, if the Plan defines service in terms of hours.

Switch to Plan Year
OR
Anniversary Year

Select whichever method the Plan defines as the computation period method.

Required, if the Plan defines service in terms of hours.

Plan Enrollment Date Rules: These fields determine how the participant's Enrollment Date is calculated.

Plan Enrollment Date Start (MM/DD)

Enter the Month and Day on which eligible participants will be able to enroll. This field is used in conjunction with the Plan Enrollment Cycle field and the Enrollment Start Rules options. For example, if a participant is eligible as of 05/24/2007 and you enter 01/01 (with Monthly as the cycle frequency and Enroll Next as the Enrollment Start Rules option), the participant's Eligibility Date will be 06/01/2007.

Required, if the Plan defines entry dates.

Plan Enrollment Date Cycle

Enter the frequency (monthly, quarterly, etc.) in which an eligible participant will be able to enroll. This field is used in conjunction with the Plan Enrollment Start (MM/DD) field and the Enrollment Start Rules options. For example, if a participant is eligible as of 05/24/2007 and you select Monthly (with 01/01 as the Plan Enrollment Start date and Enroll Preceding as the Enrollment Start Rules option), the participant's Eligibility Date will be 05/01/2007.

Required, if the Plan defines entry dates.

Eligibility Start: Select one of the following options.

Enroll Next

Select this option to make a participant's Eligibility Date the next available Enrollment Date.

Required, if the Plan defines entry dates.

Enroll Coinciding with or Next

Select this option to make a participant's Eligibility Date the date coinciding with the Eligibility Date or the next available Enrollment Date, whichever is earlier.

Required, if the Plan defines entry dates.

Enroll Preceding

Select this option to make a participant's Eligibility Date the preceding Enrollment Date.

Required, if the Plan defines entry dates.

Enroll Nearest

Select this option to make a participant's Eligibility Date the nearest Enrollment Date.

Required, if the Plan defines entry dates.

Exclude from Eligibility

Management Account

Select this check box to exclude any participants from the eligibility process that are flagged as Management Accounting on the Setup>Participants>Participant Plan Other Information - Flags tab.

Optional

Segregated Accounting

Select this check box to exclude any participants from the eligibility process that are flagged as Segregated Accounting on the Setup>Participants>Participant Plan Other Information - Flags tab.

Optional