Eligibility of a Rehired Employee

[Guest KevinP]

According to the document the employee, upon rehire, becomes eligible for the plan in the same fashion the employee was when they left employment. This is only true if the participant did not have 5 Breaks in Service. Here is my dilema, the participant satisfied the eligiblity, but never entered the plan becuase they terminated prior to the entry date. I say the participant is eligible, but must wait until the next entry date to participate, and does not participate immediately because the employee was never really a participant even though they satisfied the eligibility requirements.

Is my thinking way off? Would someone be so kind as to set me straight on this topic.

[Guest SPOT]

Most of the documents I use say that if the employee had satisfied the eligibility req. but termed before plan entry, then he/she would enter the plan on the later of the rehire date or the plan entry date following attainment of eligibility req. Are you looking at a prototype? If I am familiar with it, I can point you in the right direction

[Guest Dook]

This also assumes there has not been a break in service. If a break had occurred, then the plan could ignore the pre-break service for eligibility.

[Guest carsca]

Dook,

Can you provide a citation to the regulations to support your statement?

My understanding is that prior service can be ignored in a case like this only under the Rule of Parity. In other words, prior service can be ignored if an individual (1) is a participant in a plan, (2) is 0% vested in employer contributions and (3) has a Period of Severance of at least five years or a 5-year Break in Service.

Here, the conditions of the Rule have not been satisifed since the individual did not become a participant. Thus, prior service should be counted.

Do you agree?