Can allocation conditions for QNECs specify a requirement such as working a minimum number of hours?

The correct answer is that allocation conditions for Qualified Nonelective Contributions (QNECs) can specify a requirement, such as working a minimum number of hours. QNECs are contributions made by an employer that are designed to enhance the retirement savings of employees, particularly those who are non-highly compensated.

One of the key features of QNECs is that they can be contingent upon certain allocation conditions, which can include various employment-related criteria. These criteria may involve stipulations such as the employee working a minimum number of hours during a specified period, which can help ensure that the contributions are awarded to those who are actually engaged in work for the employer.

This flexibility allows employers to tailor their QNEC structures to align with their workforce management strategies while still adhering to the overarching regulations set by the Internal Revenue Code. Therefore, the statement that allocation conditions for QNECs can include requirements like minimum work hours is accurate and reflects the established practices within qualified plans.