Eligibility/Vesting for Rehires

[Guest Jeff Underwood]

Employee had the required 1,000 hours of service, but terminated prior to entering the plan. Employee was rehired after incurring a break in service. It is my understanding that the employee must "start over" for eligibility purposes. Can anyone confirm this (preferably with a citation)? Also, does the employee retain the year of service for vesting purposes?

[Guest Jeff V]

It'll probably be up to the plan document. There should be rules for both eligibility and crediting prior vesting.

The rules don't really provide a maximum, just a minimum.

[Guest Jeff Underwood]

According to the fellows at McKay Hochman, the plan document does not address the situation I described above (which is why I asked the question here). It only addresses rehiring participants. An employee who has not yet entered the plan is not a participant.

[KJohnson]

You might want to look at this prior

post that discusses the applicable 410(a) regs.

http://benefitslink.com/boards/index.php?showtopic=4519

I think that, as a practical matter, you could probably hold out someone in a profit sharing or MPP Plan until they complete another year under these regs, but you couldn't hold out someone in a 401(k) because there would be no way to put them "back in" the Plan retroactively. I haven't looked at this in a while, but I believe the regs cited in the prior post are the place to begin.