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Break in Service Rules


PFranckowiak

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Eligibility 3 consecutive months

Assume Hired 2/15/2013  works only 400 hours a year.

Came into plan 7/1/2013

Terminated     8/1/2019

Rehired 2/1/2010

Never had 501 hours so they are all breaks in service.  Doc says we can exclude if employee had 5 or more consecutive breaks in service.  Does that include the years he was working too?

never put any money in the plan

 

Thanks

 

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Read your plan's definition of a Break in Service very carefully.  

 

Most plans simply say a BIS is any year  a person works <501 hours.   Some plans I have seen say any year terminated and works <501 (rare but I have seen it).

If it simply says a BIS is any year a person works <501 hours I think this person had a BIS all the years they worked. 

So this person has 5 BIS in 2019.   

That has been my understanding of these rules.  I have a number of staffing firm clients that can have many people do what you describe and we have consistently said you can work in a year and still have a BIS.  

It seems odd but I think it is true.

It will be interesting to see other people's take on this.

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39 minutes ago, PFranckowiak said:

Eligibility 3 consecutive months

Based on counting hours, or elapsed time?

If elapsed time, the hours don't matter and the service spanning rule means you don't have a period of severance.

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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