403b Plan - Incorrect vesting calculation - suggestions?

[Guest JMichael]

I was laid off last July by my employer who had us in a 403b plan. I started Feb 1998, so I was not vested until I had completed over 1000 hours in 1999, thus 20%. Plan years were Jan 1- Dec 31.

So at the end of 2000 I was 40%, and should have been 60% because my effective termination date was July 13. (I got the news July 6) Since I was on straight salary, my math calculates 1,120 hours of service, but the disbursement people told me that the employer reported only 992 hours. We submitted time sheets monthly, so I had all the way through June 30 at the very least which should be 1,040 hours.

Does this seem like an obvious dodge to try and cheat me out of 20%? I've called them but they haven't done anything or provide me with the records to back up their claim. Their Plan handbook specifically states that all time for which I was paid is credited as service time including vacations, holidays, etc... Their plan Administrator gave me some line about 'taking actual working time since I was so close to 1,000', but that seems in contradiction to the handbook. Whether I use June 30, July 6, July 13, or July 31 (I was actually paid through the end of July.), I'm still over 1000. True?

I've read the statutes here, but don't see anything focusing on rules about what MUST constitute service for purposes of the 1,000 hour mark.

Any suggestions on what to do next?

Thanks in advance,

J. Michael.

[mbozek]

I am assuming that the handbook u are referring to is a Summary Plan Description. Under the Federal pension law (ERISA), nonprofit employers are required to state the 403(b)plan terms in an SPD including the requirements for determining a year of service. Normally the requirement is to accumulate 1000 hours for which the employee is paid during the plan or calendar year. Once the employee has performed the service required for a yr of svc then the employee is credited with a year of svc. You should review the handbook to determine if you completed 1000 hrs for 2000 as defined in the SPD. Hour of service should be defined in the SPD. If you did then you should look in the SPD/handbook for the plan to find the procedure for filing a claim for benefits for the last yr of service and submit the claim in writing to the plan administrator. The PA must either pay the claim or send you a letter explaining the reason for the denial based upon the terms of the plan. The PA has 120 days after receiving the claim to make a decision. You could also file a complaint with the US Department of Labor but it is unlikely that they would investigate the claim. If the employer is a public or religious employer then the above rules will not apply.