What is a 401(k) waiting period?

Waiting Period The longest waiting period that a 401(k) plan can utilize one year of service, which is defined as a 12-month period in which an employee works at least 1,000 hours. The plan can be more generous but not more restrictive, and a plan can use different provisions for different groups of employees.

What does eligibility mean in a 401(k) plan?

Here’s what you need to know. Eligibility defines the criteria for when an employee becomes a participant in the 401 (k) plan. You may allow employees to become participants immediately or may require them to meet a minimum age or service condition first. You may also want to keep certain employees out of your 401 (k) plan altogether.

How long does a 401(k) plan last?

Most plans call for one year of service to equal 1,000 hours worked in a plan year, but plan documents vary. Employees may become eligible to participate in their company’s 401 (k) plan well before they become eligible to vest in their employer contributions. There are three types of vesting schedules: