If a plan has different age/service requirements for different job classes, how should one determine excludable employees?

When determining excludable employees in a plan that has different age and service requirements for various job classes, it is essential to understand the implications of selecting the most lenient set of requirements. The rationale behind this approach is founded in ensuring compliance with the non-discrimination rules established by the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (IRC).

Using the most lenient requirements allows a broader category of employees to be eligible for participation in the plan, thus promoting inclusivity and compliance with nondiscrimination regulations. This method ensures that no specific job class is unfairly advantaged or disadvantaged, which is crucial for maintaining the plan's qualified status.

If excludable employees are determined using the most stringent requirements, it could lead to a scenario where a significant number of employees are excluded from participating in the retirement plan solely based on their job classification, resulting in potential violations of ERISA's requirements.

In this context, selecting the most lenient requirements serves to protect employees across various job classes, promotes wider participation in the retirement plan, and upholds the plan’s compliance with legal standards.