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Jim Chad

Does measuring period for break in service change upon rehire

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The doc says measuring period for "break in service" for Eligibility  is the 12 months starting on the first day of employment.

Example:  No vested account balance

DOH   3-4-2008

DOT  5-15-2009

DO Rehire  7-5-12

DOT  6-20-2015

DO rehire  11-29-17

What date do I use to start my measuring period for counting "breaks in service"

?

 

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18 minutes ago, Jim Chad said:

The doc says measuring period for "break in service" for Eligibility  is the 12 months starting on the first day of employment.

Example:  No vested account balance

DOH   3-4-2008

DOT  5-15-2009

DO Rehire  7-5-12

DOT  6-20-2015

DO rehire  11-29-17

What date do I use to start my measuring period for counting "breaks in service"

?

 

All of this depends very much on the actual plan language.

1.  There are three kinds of service (which may, depending on plan language, overlap):  Eligibility service (used to determine eligibility to become a participant and, depending on plan language, possibly to determine eligibility for early retirement or disability), accrual service, and vesting service.  The plan should clearly indicate how each one works.  Eligibility service will often be measured in terms of the first 12 months of employment, usually switching thereafter to plan years (beginning with the plan year beginning during that 12 month period if the person did not complete enough hours during the first 12 months of employment).  Benefit accrual service and vesting service would normally be measured in terms of plan years, possibly with partial accrual of service in the first or last plan year of employment.

2. As the individual would surely have entered the plan prior to the most recent date of termination (2015, after nearly 3 years of employment), eligibility service is no longer relevant - resumption of status as an active participant will either be immediate or, after a full year from date of rehire, retroactive to date of rehire). 

3.  For vesting purposes, as at no point did the person incur a break of at least 5 consecutive years, all service (including the 2008-09 period) must be taken into account for purposes of determining vesting service.  It's a good 30 years since the rule of parity operated to disregard a year of service preceding a 3-year break.  Nothing can be disregarded unless there has been a 5-year break.

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