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Found 3 results

  1. An employee was recently moved from a foreign entity to the US entity of the same company that sponsors a 401(k). They are a resident non-citizen with US income now. Should the original hire date form the foreign entity be used for crediting service for vesting? Or the date that they moved to the US and began employment with the US entity? The plan document is mum on the topic; no provisions that state how to credit service based on service at the foreign entities. The plan has immediate entry but ER contributions have a vesting schedule. Thank you in advance.
  2. Our ESOP administrator reinstates shares for those rehired participants that terminated employment with a 0% vested balance. There is no time limitation for reinstatement. It was my understanding that if a participant terminated employment 0% vested the terminatino date was considered a distribution and the 5 year Break in service rule calculation would start. Is there a limitation on reinstatement for 0% vested rehires? The plan doc does provide language for partially vested balances reinstated within the 5 year break in service for those that return the vested shares.
  3. Takeover client's 401(k) plan eligibility requirement is: "Eligibiiitv: All employees other than excluded classes shall become a participant with respect to employer contributions on the entry date on which the participant first meets the following requirements: (I) Attains age twenty-one (21) and (2) Completes 500 hours of service." The 1000 hour year of service rule applies after the first year. Entry dates are semiannual. Plan has been administered as requiring 500 hours of service AND 12 months of employment, and then entering the plan on the next semiannual entry date. (It seems to me that, in the past, anyone who completed 500 hours of service at any time within the first 12 months of employments should have entered the plan on the next entry date, and not until the first entry date after 12 months of employment, so there may be corrective contributions to make.) At any rate, we are now preparing the PPA restatement. Client wants to have a "500 hour and 12 months of employment" rule to permit part time employees into the plan, as long as they work over 500 hours annually. Client does not want to let employees with less than 500 hours per year (there are some) into the plan. We can elect eligiblity requirements in our volume submitter document that would provide: "Any Eligible Employee who has completed 500 Hours of Service within 12 consecutive months from the initial date of employment and has attained age 21 shall be eligible to participate hereunder as of the date such Employee has satisfied such requirements." The question is regarding the phrase "as of the date such Employee has satisfied such requirements." Similar language appreas in other prototype and volume submitter documents that I checked. I thought that, unless a plan used the statutory "year of service" definition, that any lesser hours requirement for initial eligibility had to provide for eligibility "as of the date the requirements are satisfied." So, in our document, as in the existing EGTRRA document, if a full-time employee meets the 500 hours requirement after 3 months, he would enter the plan on the next entry date, NOT after 12 months. An associate has recommended using the "other" option in the volume submitter document to say: "Any Eligible Employee who has completed 12 CONSECUTIVE MONTHS OF SERVICE in which he has at least 500 Hours of Service and has attained age 21 shall be eligible to participate hereunder as of the date such Employee has satisfied such requirements." That would appear to require both 500 hours of service AND 12 months of employment, but I am still thinking that the use of both hours and months (and NOT using the statuory "year of service" definition) would still require the plan to count the hours and bring employees into the plan on the next entry date after the 500 hours are met. Any thoughts would be appreciated
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