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Showing results for tags 'inactive employee'.
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FACTS: CA employer sponsor Safe Harbor 401k plan Eligibility waiting period is 1 Year of Service (12 mos, 1000 hrs) Plan Entry Dates: 1/1 and 7/1 coincident with/following waiting period Employee "A" is hired 3/15/2019 on full-time basis. Projected Entry Date is 7/1/2020 On approximately 1/15/2020 "A" apparently moves and does not show up for work, without any notice to CA employer/plan sponsor. Sometime thereafter the CA employer learns "A" claims to have become disabled since moving and has filed for state (and/or Federal) Disability; "A's" request is denied apparently due to failure to satisfy Disability requirements. "A" did work > 1000 hours from Date of Hire (3/15/2019) to the last day "A" reported for work (approx 1/15/2020). To date, "A" has not been in contact with the CA employer/plan sponsor. The CA employer does not want to send a termination notice in as it fears "A" may try to sue, claiming terminated due to disability. The CA employer/plan sponsor wants to know if "A" must be provided with enrollment materials at this time (based on 7/1/2020 entry date). They would prefer not to reach out if it is not necessary. The Plan provides: 1.63 "Period of Severance" means a continuous period of time during which an Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service. QUESTIONS: At what point is "A" no longer an employee of the employer? If "A" is still an employee, albeit an "inactive" employee, when is the employer obligated to provide Enrollment Materials? If "A" is still an employee, albeit an "inactive" employee, what determines termination/severance from employment? Does CA employment law provide a standard for this situation, or, any federal guidelines? It seems worst case scenario is "A" continues to be an employee, and, since "A" has 1000+ hrs and more than 12 mos have elapsed since DOH, "A" is eligible with an entry date of 7/1 - or is it the date "A" returns to service if later? Failure of employer to provide Enrollment Materials at this time (or later if eligibility entry date is later date) can be corrected... but if "A" earns zero the correction will result in $0 contributions due. Any help and/or insight is appreciated. Thank you.
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- 401k
- eligibility
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