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Belgarath

Non-ERISA (public school) eligibility

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Belgarath    352

You do see some strange things in non-ERISA plans. Consider the following, which I think is likely a bad idea from employee relations and/or union contract deals, but I can't see anything technically wrong with it in terms of violating the 403(b) regs. Any other thoughts? Maybe I'm missing something.

This is for EMPLOYER CONTRIBUTIONS ONLY. Deferrals appropriately follow all the "normal" rules. 2-year eligibility (1,000 hours for a YOS) for employer contributions. Plan year is calendar. Fiscal year is 6/30 Y/E. If you don't meet your eligibility in the first two employment years, subsequent eligibility computation periods shift to the FISCAL year BEGINNING  AFTER the end of the two year period. So, in essence, it would be possible to completely ignore nearly an entire year of service depending on hire date - for example, if hired on July 15th, and you don't meet eligibility in the first two years, then the next eligibility period doesn't begin until 7/1 of the following year. Is that strange, or what? Anyone ever seen anything similar?

P.S. - I'm dubious that many of the new Pre-approved documents, when available,  would permit this anyway...

Edited by Belgarath

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Typically, when computation periods change, there is an overlap.  So, I agree with you that the "BEGINNING AFTER" clause does seem a bit odd. I cannot even begin to imagine what is being implied.  By that time, the participant would've already work 15 days short of another year and could've easily worked 1000 hours during that time.  I cannot imagine they'd lose that year.

Good Luck!

Edited by ETA Consulting LLC

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