The Issue: May employers exclude certain
classes of employees (e.g., interns, part-time employees,
temporary employees) from participation in a qualified retirement
plan?
The Solution: Yes, subject to certain caveats.
Employers should consider how they define excluded employees,
as well as coverage and nondiscrimination requirements.
Analysis: While employers may generally
exclude a specified class of employee from participation, it is
important to clearly understand how the class is defined and beware
of nondiscrimination rules. For example, "interns"
and "independent contractors" may actually be employees,
but it may still be possible to exclude them. In the latter
category, plans often exclude temporary employees. If the
definition of temporary employee is hours-based (e.g., a
person hired for a short period of time) then the employee must be
allowed to participate if the employee satisfies a year of service
(i.e.,1,000 hours). Similarly, while interns may
