Jakyasar Posted December 2, 2020 Share Posted December 2, 2020 Hi Newly established db plan 7/1/2020 to 6/30/2021. The owner's spouse was an employee in the past and part of a terminated db plan, 10+ years ago. I believe he may have been a part owner back then, no information on that. He has been working for the company but did not receive any salaries for the past 10 years. Does it matter if working less than 501 hours or even less than 1000 hours? They want to include him in the new plan and he will start taking salary as of 1/1/2021 i.e. mid year. Does the plan need a special eligibility amendment or he is assumed to have had employment for eligibility in the past? I believe yes. As he had nonforfeitable rights in the old db plan, if I understand correctly, rule of parity does not pay a role here?? Thank you Link to comment Share on other sites More sharing options...
Jakyasar Posted December 3, 2020 Author Share Posted December 3, 2020 Any takers on this? Link to comment Share on other sites More sharing options...
Jakyasar Posted June 26, 2021 Author Share Posted June 26, 2021 Hi Since the issue just came up again, wanted to follow up and see if any comments? Thank you Link to comment Share on other sites More sharing options...
Mike Preston Posted June 26, 2021 Share Posted June 26, 2021 In general, I shy away from posts which are internally inconsistent. You ask a question in the form of a or b and then you say yes. Very difficult to figure out what to say without going into great detail. Perhaps break it down and ask simpler questions? Link to comment Share on other sites More sharing options...
Jakyasar Posted June 28, 2021 Author Share Posted June 28, 2021 Hi Mike I hope the following is a more simplified way. I tried to provide as much information about the facts and my thoughts. In my many years, this is the first time I came across a situation like this and a bit puzzled. Facts: Newly established db plan 7/1/2020 to 6/30/2021. Same sponsor had a db plan that terminated 10+ years ago. The owner's spouse – John - was an employee and also a participant in the old db plan. I believe the sponsor was owned by John's parents in the past and now owned by John's wife. Never got a clear response on this. John continually works for the sponsor however stopped taking any salaries for the past 10 years. John works between 501-1000+ hours each year for the past 10 years They want to include him in the new plan and he will receive a salary by 6/30/2021 Questions: Does the plan need a special eligibility amendment to have him included as of 6/30/2021 i.e. waiving the 1 year wait? As he had nonforfeitable rights in the old db plan does rule of parity play a role here? John was paid out his 100% vested accrued benefit (lump sum form) Thank you Link to comment Share on other sites More sharing options...
Mike Preston Posted June 28, 2021 Share Posted June 28, 2021 1 hour ago, Jakyasar said: Hi Mike I hope the following is a more simplified way. I tried to provide as much information about the facts and my thoughts. In my many years, this is the first time I came across a situation like this and a bit puzzled. Facts: Newly established db plan 7/1/2020 to 6/30/2021. Same sponsor had a db plan that terminated 10+ years ago. The owner's spouse – John - was an employee and also a participant in the old db plan. I believe the sponsor was owned by John's parents in the past and now owned by John's wife. Never got a clear response on this. John continually works for the sponsor however stopped taking any salaries for the past 10 years. John works between 501-1000+ hours each year for the past 10 years They want to include him in the new plan and he will receive a salary by 6/30/2021 Questions: Does the plan need a special eligibility amendment to have him included as of 6/30/2021 i.e. waiving the 1 year wait? As he had nonforfeitable rights in the old db plan does rule of parity play a role here? John was paid out his 100% vested accrued benefit (lump sum form) Thank you Sure does sound like he's been an employee all along. Doesn't that answer all of your questions? Link to comment Share on other sites More sharing options...
Jakyasar Posted June 28, 2021 Author Share Posted June 28, 2021 Yes and thank you, much appreciated Link to comment Share on other sites More sharing options...
Jakyasar Posted June 28, 2021 Author Share Posted June 28, 2021 If I may ask one more question - hopefully not exceeding my daily quota. Changing the scenario, let's assume John did not work for the past 5+ years at all i.e. terminated. Would he still be considered an employee? Rule of parity rules are a bit confusing for me. Thank you Link to comment Share on other sites More sharing options...
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