Crediting Service with Prior Employer

[Lori Foresz]

Hi,

Does a former employer have to be related to the current employer in order to credit service with the former employer (for eligibility purposes) under the new employer's plan? I understand that the crediting of past service must not discriminate, but that a 5-year safe harbor rule applies. So, can the owner of a company be granted one year of prior service with his former employer but make all the employees wait 1-year to enter. The answer would seem to be no, but can't find it anywhere.

If anyone can help, that would be great.

Thanks

Lori

[WDIK]

Does this help?

[Lori Foresz]

Hi,

Yes, it does. However, the conclusion seems to be that it is a gray area. I still need to read 1.401(a)(4)-11(d)(3)(i) to see if that helps as well.

Thanks for the link!