SECURE Act FAQs
Long-Term Part-Time Workers Provisions
The SECURE 2.0 Act introduces significant changes to retirement plan administration, particularly around Long-Term Part-Time (LTPT) and Former Long-Term Part-Time (FLTPT) employee provisions. This document provides answers to frequently asked questions to help internal teams understand the implications and prepare for implementation.
5 Important Facts to Know
- LTPT Eligibility and Contributions Mutual of America’s default setup is that LTPT employees can contribute all employee money types (e.g., Roth, after-tax, rollovers) like regular participants. Employer contributions are optional and must be elected by the plan sponsor.
- Vesting and Entry Rules LTPT participants follow the same entry date rules as regular participants, regardless of whether employer contributions are offered. If LTPT participants receive employer contributions, they also follow the same vesting schedule as regular participants. No separate vesting or entry options are allowed.
- Compliance and Testing Mutual of America’s default setup is for LTPT participants to be excluded from compliance testing. Sponsors should contact their CRM with any questions.
- Work Order and Transition Handling Mutual of America will schedule annual work orders for plan-year evaluations. Sponsors must report transitions from part time to LTPT, as well as LTPT to FLTPT via a work order with the entry date/effective date.
- System Support and Communications Mutual of America systems support LTPT enrollment and contributions. Sponsors will receive communications, CRM training, and alerts for overdue work orders.
Frequently Asked Questions
The following table summarizes the default provisions and available options for LTPT participants as configured in Mutual of America's systems under the SECURE 2.0 Act.
| Topic | Default |
|---|---|
| Employee contributions | LTPT participants will be able to contribute all employee contribution money types as regular participants (e.g. rollovers, Roth, after tax, etc.). Giving LTPT participants the opportunity to contribute pre-tax elective deferrals (pre-tax contributions) is the legal requirement. |
| Employee contributions | LTPT participants do not get employer contributions. |
| Vesting Schedules | LTPT participants (of plans which allow LTPT participants to receive employer contributions), must have the same vesting schedules applied (by money source) to LTPT participants as is applied for regular participants. |
| Compliance testing | LTPT participants will be excluded from Compliance testing. |
| Other contribution attributes/offerings | The same entry date determination should apply to LTPT participants that applies to regular participants. |
| LTPT Entry Dates | LTPT participants will be allowed to participate in the following, in the same manner as regular participants are able: Catch-Ups, automatic deferral, automatic escalation. |
| LTPT Years | For Vesting, whatever accrual period applies for vesting for regular participants, will apply to LTPT. |
| LTPT Hours of Service | Actual hours. |
Sponsors should review the default handling and available options for LTPT participants. If they wish to select an option other than the default configured in Mutual of America's systems, they should contact their Client Relationship Manager (CRM) to request the change.
A Board resolution is required only if the employer’s governing authority to amend the plan resides with the Board of Directors. However:
- If the Board has delegated amendment authority to an officer or a committee (e.g., a Fiduciary and Benefits Committee), then the authorized person’s signature on the amendment is sufficient.
- For employers without a Board (such as partnerships, sole proprietorships, or churches), a Board resolution is not applicable.
- Plan sponsors should confirm their governance structure and delegation of authority before proceeding.
Mutual of America will schedule work orders annually for plan-year-based evaluations. Employment-year-based plans must submit ad hoc work orders.
FLTPT employees are individuals who were previously classified as LTPT but have now met the standard eligibility requirements. Once reported to Mutual of America as FLTPT, they are treated as having satisfied eligibility Plan sponsors only need to report the transition from LTPT to FLTPT once, using a work order that includes the effective date of the change.
Sponsors must report the change once via a work order with the effective date of the transition. NOTE: There is no transition from FLTPT back to LTPT
Yes. LTPT individuals will be enrolled and allowed to contribute and receive employer contributions based on plan sponsor selections.
Mutual of America will provide plan sponsor communications and alerts for overdue work orders.
