Leaderboard

Normally, hire date and "service" are usually defined as when you've worked an hour of service as defined by the plan. The hire date, in that case, would be the beginning of the first day worked. For termination, it would normally be the end of the day the last hour worked occurred.

I am replying to your duckthing question below even though it isn't directed towards me. I guess I would have to read that provision carefully. What I can tell you is back when I did balance forward PSPs and now with ESOPs that would be 2018 compensation for every plan I can think of . In fact if the person was over NRA and the plan didn't require retirees to work 1,000 hours and be active on the last day of the plan year we would give such people a 2018 PSP or ER discretionary contribution in the ESOP. I see that all the time in my job. A retiree gets a small cont in the year after they termed if they termed during the last week of the prior year. I know way back when I did 4k plans (all balance forward) I would see these small checks hit in the following year (2018 in this case) with a small amount of deferrals. We always treated them as comp and deferrals in the year they were paid not earned- ie 2018. I agree a plan can be written such that is income in the year worked (2017 in this case) but you can always count it as comp in the year it is taxable per the law has always been my understanding. And most people I know think it is a pain to have the census comp to not match up with the W-2s for any given year. So I can't recall the last time I saw someone who treated this as 2017 comp. Most plans I have seen over the decades starts the definition of comp as either gross comp or W-2 comp. If it is W-2 comp as the starting point I don't see how it can be anything other then 2018 comp unless it then specifically says in this case to push it back to the prior year. But that seems like a mistake waiting to happen. It will always be easiest to have your plan comp starting point to match the sum of the employer's W-2s as that is easy to reconcile to. . Even gross comp was treated as when paid for that definition. But you could go back to the year earned but once again that meant the census didn't match the payroll system so I know of no one who does that. In that regard I agree with Tom you can pick one or the other but you do have to pick.

Words have meaning, and can be useful for correct understanding. It may be prudent to avoid "pay back", or "repay", because those terms are not indicative of a rollover. On the other hand, if the plan makes a loan, don't use the word "rollover" at the time of repayment.

I agree with the above, but it seems a bit tangential to the original poster's question. It is possible for no suspension at all to be required after a hardship withdrawal. Yes, a plan document could require a 12-month suspension instead of a 6-month suspension that is now in the safe harbor portion of the hardship regulations. This was quite common for the first couple of years after the regulation lowered the suspension period's length from 12 to 6 months. There is no citation that supports this. The structure of Code Section 401(a) is to list various prohibitions for qualified plans and anything else is permitted. Given the absence of a rule that claims "elective deferrals may be suspended only under specified circumstances,," then a plan may make up its own suspension rules.

Just a simple prediction here that doesn't really help answer this question. Anyone who can't take more loans and needs to play these kind of games to pay bills is going to not pay it back 60 days later. So while your advice needs to be correct obviously it is all academic most likely.

I would side with Belgarath on this one, and will go back to Plan Sponsor for clarification. If they would want to make a case, they can change the date of termination in their systems to 12/31.