What are "eligibility requirements" in 401(k) plans?

Eligibility requirements in 401(k) plans specifically refer to the conditions that determine who is allowed to participate in the plan and make contributions. These requirements typically include factors such as age, service time, and employment status, all of which collectively define the pool of employees who can contribute to the retirement savings plan.

While age restrictions for plan access may be part of the broader eligibility criteria, they do not encompass all aspects of what eligibility requirements entail. Similarly, conditions for employer matching contributions and requirements for account maintenance relate to specific features of the plan but do not address the fundamental aspect of who may contribute. Thus, the focus on defining participation through eligibility requirements is essential for understanding how 401(k) plans operate. Properly understanding these requirements ensures that both employers and employees comply with the plan’s provisions and regulations.