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Found 10 results

  1. Need some help. Plan has 1 year of service, 1000 hours and dual entry. FTW Document - Rule of Parity & 1 year hold out is not elected i have an employee hired 8/2020 termed 3/2021. Worked over 1000 hours Rehired 8/2022 Since she worked over 1000, would she enter on rehire date? Appreciate your help. Thanks!
  2. Hoping someone can help. Plan's eligibility is 2 months of service, with monthly entry its an FTW Doc and reads, Completion of 2 consecutive months of continuous service (not to exceed 12; hours of service failsafe apply) Rolling period i have an employee hired 10/7/2020 terminated 11/7/2020. Rehired 10/27/2022 Trying to determine if he is eligible. since he worked in both Oct and Nov in 2020 does this count as his 2 months of service? Thank you!
  3. DB plan established in 2017. Employee worked for employer 2007-2015. Employee rehired 9/1/18. Therefore, enters plan 9/1/18. Since employee won't have 1000 hours in 2018, is that employee treated as benefiting under the plan? If not, then is an 11(g) amendment required to bring in employee to meet 410(b) [currently, 4 HCE-1 excluded, and two NHCE-counting the rehire)? Here, 410(b) would be 50%/75%=67%. I don't see any relief from Reg. ยง410(b)-3. I don't think that an 11(g) amendment could be made to merely apply the 1-year holdout rule, which would make the rehire wait until one Year of Service has been met (which, then avoids the dilemma. Am I missing something here?
  4. I was terminated from my job in July, however, I was told I am eligible for re hire as long as my 401k loans were paid back. I have more money in my 401k than the loans that I borrowed. I do not owe the employer the money, it was MY money that I was contributing to the plan, that I borrowed from. Since I am unable to pay back the loan, I have to let it roll over as earned income in my taxes. Why am i being told i have to pay back MY money before i am eligible to re apply and be considered for employment again with the same company. I could understand if I owed the company money, but it was my money. Is this legal? (And I know, why fire me if you're just going to tell me "you're eligible for rehire..")
  5. Have a "splitting hairs" question. Plan document reads: (6) Return to employment. A Participant may not receive a distribution based on Separation from Service, or continue any Installment distribution based on a prior Separation from Service, if, prior to the time the Trustee actually makes the distribution, the Participant returns to employment with the Employer. At issue is the meaning of the phrase "Participant returns to employment" in the last sentence. I contend that the employee has returned on the date he or she begins working. I base this on the fact that his/her re-hire date is the date he/she begins working, not the date called. Another party interprets that the employee has "returned to employment" if he or she has been notified they are being called back to work. A distribution was in process to the terminated employee. Before the funds were paid out, both parties were notified that the employee had been re-hired with an effective date three weeks in the future. I contend we should not stop the distribution. The more conservative party (who by the way is very highly regarded and I have the utmost respect for) states that because we know he will be rehired, he has "returned to employment" and we should stop the distribution. I've made my decision but am curious to run this by other experts out there. Thanks much!
  6. Hello, If an employee quits and gets rehired as a consultant with no benefits, do he/she have the ability to cash out their 401K? Thanks for your help!
  7. Employee was hired on 1/15/18. Employer laid off employee on 2/15/18. Employee was rehired on 5/7/18. Plan has 90 day service requirement to be eligible for the plan. Contributions can start on 1st day of the month following the month when 90 day service requirement is reached. I've seen plenty of examples if the employee terminates/quits/is fired/etc. Is a layoff viewed in the same way? In most examples I see, it appears that time from 2/15/18 to 5/7/18 wouldn't even be considered a break in service. Is this correct? My thought is that as of 6/6/18, employee has completed 61 days of service (1/15-2/15 and 5/7-6/6). The time in between doesn't count and 29 days from now, on 7/7/18, the employee is eligible. Entering on the 1st day of the following month would mean employee is eligible to contribute and get employer match beginning on 8/1/18. Can anyone confirm or correct me? Thank you!
  8. Good evening, I could use some help in determining the entry date for an employee who, on two occasions, worked a short period before terminating, and was ultimately hired full-time after his second termination. He never met the service requirement prior to being terminated on either occasion, but currently has satisfied it. The potential issue is, the plan sponsor allowed the employee to participate on the entry date following his satisfaction of the service requirements following his most recent hire date, but I am of the opinion that he should not have been allowed to enter the plan until the beginning of the most recent plan year. Plan specs are as follows: Plan Year is 11/1 - 10/31 Plan eligibility is 1 YOS/Age 21 with monthly entry dates Actual hours counted (1000) No BIS rules apply ECP shifts to plan year after initial ECP ends Paraphrasing & summarizing plan's master document provision regarding rehired Eligible Employee who failed to satisfy eligibility requirements: for purposes of applying any shift in ECP, employee's prior service is taken into account and employee is NOT treated as a new hire (emphasis mine). Employee data is as follows: Birth date: 6/27/90 Initial Hire date: 6/28/10 Initial Termination date: 8/25/10 1st Rehire date: 5/11/13 2nd Termination date: 8/16/13 2nd Rehire date: 5/12/14 Plan sponsor allowed EE to begin participation after 6/1/15 Hours worked during ECPs (using my understanding of plan document): 6/28/10 - 6/27/11 - 246 11/1/10 - 10/31/11 - 0 11/1/11 - 10/31/12 - 0 11/1/12 - 10/31/13 - 527 11/1/13 - 10/31/14 - 960 11/1/14 - 10/31/15 - 2080 The plan sponsor, I believe, began a new ECP as of 5/12/14, and has credited the employee with a year of service as of 5/11/15, allowing him to participate as of 6/1/15. I believe that, since there are no BIS rules in effect, and the plan document does not seem to allow for "resetting" the ECP to his latest rehire date, that he should not receive credit for a YOS until 10/31/15 and he should not be allowed to participate until 11/1/15. (Our recordkeeping software agrees with me, not that that means anything.) I actually hope I am wrong on this one because the employee has been making deferrals since June 2015 and received an employer contribution for 10/31/15, so corrections would be in order if I am right. Thanks to anyone who read this far...
  9. A safe harbor profit sharing plan excludes part-time employees using the following language: "Part-time Employees not scheduled to work 1000 hours in a 12 month period, except that if such a Part-time Employee does work 1000 hours in a 12 month period, then such Employee shall become an Eligible Employee." If an eligible employee (worked 1000 hours) terminates in 2013, then in 2014 is re-hired as a part-time employee and does not work 1000 hours - is that employee still eligible for the safe habor 3%? If the plan document didn't define "part-time" emplyees this way and just used a job class like "office staff", would that make a difference? For instance if the plan excluded only "office staff", and if the eligible employee was not an "office staff" before termination but then hired as "office staff", could we exclude them?
  10. It just keeps getting more interesting. I'd love anyone's thought on the following, which relates to the intersection of the new world of the Affordable Care Act and Health Reimbursement Accounts (HRAs). Here's what I know: 1. HRAs, to comply with the ACA, must be 'integrated' with the health plan. 2. Stand-alone HRAs are out - unless its a retiree-only HRA. I have clients (public sector) who have an Active Employee (integrated) HRA (employer makes contributions to active employees) AND a retiree-only (stand alone) HRA (employer makes specified contributions for a limited number of years to retirees. Here's the the @#%# hits the fan: Client may want to rehire a retired individual (who still receives the retiree HRA contribution in the retiree-only HRA account) for part-time work. In the re-hired position, the individual is eligible for the active employee HRA contribution. Some vendor/promotor types, locally, are scaring a lot of employers by pointing out the conflict here, and saying that the active-employee HRA made for the retiree will "blow up the retiree HRA" (which, if it is not for retirees-only [by receiving a contribution for an 'active', does not satisfy the ACA). I believe that an assumption is being made here that there is only one HRA and that an active-employee's HRA is 'converted' into a retiree-only account when someone retires. In actuality, I believe that we should actually be talking about two separate HRAs here: one for actives (integrated) and one for retirees. Contributions make to a retiree should go into a literally different/segragated account than for when the person was active. Additionally, I would think that the 'problem can be addressed' by adopting a rule under which a person is eligible for only one type, but not both types, of HRA contribution at a time. (Maybe freeze the retiree HRA contribution while the person is a rehired active. Alternately, perhaps the rehired person could simply receive both types of contributions at the same time, so long as the active-portion goes into the active sub-account and the retiree portion goes into the retiree sub-account. (The person did, after all, attain 'retirement' status at some point, and barring plan language to the contrary, arguably remains entitled to a retiree contribution). Hmmmmm..... I imagine this is an area where we'll see more regulation/guidance, but for now - it provides a window for local trouble makers to rattle the nervous employers. Sigh.
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