Certified Plan Sponsor Professional (CPSP) Practice Exam

Is it possible to simplify eligibility administration by counting hours worked for part-time employees?

1. Yes, it can be done

2. No, it must be uniform

3. Only for salaried employees

4. Yes, but only if approved by the DOL

The correct answer is: Yes, it can be done

Counting hours worked for part-time employees can indeed simplify eligibility administration in certain contexts, particularly when trying to determine eligibility for benefits under retirement plans or health plans. By tracking the actual hours worked, a plan sponsor can more easily assess whether part-time employees meet the necessary criteria for participation or benefits, as many plans have specific hour requirements for eligibility. Additionally, using a systematic approach to count hours allows for a clearer and more consistent method of determining participation. This can help streamline administrative processes, reduce errors, and enhance compliance with regulations governing eligibility. The option suggesting that it must be uniform does not take into account the flexibility provided in various regulation interpretations, which can permit differentiated eligibility criteria based on employment status, including part-time roles. The other options implying restrictions or specific scenarios (such as approval by the Department of Labor or only applying to salaried employees) do not accurately reflect the potential adaptability of eligibility criteria in practice. Such flexibility is crucial for businesses looking to efficiently manage their workforce while ensuring compliance with various requirements.