Short Plan Year

[Guest RBlaine]

I have a plan that was amended, effective 09/01/2001, to change the plan year to 12/31.

I have a short plan year for 09/01/2001 to 12/31/2001. If an employee had 1,000 hours during the period 01/01/2001 - 12/31/2001 they got 1 year of service and if they had 1,000 hours during the period 09/01/2001 - 08/31/2002 they got 1 year of service.

My question is: Do these year of service requirements apply to employees who were hired after the short plan year? For instance, one employee was hired 03/14/2002 and worked enough overtime to have 1,000 hours by 08/31/2002. Does he get that year of service, as well as the year of service for the 01/01/2002 - 12/31/2002 plan year?

[chris]

I would think that the "double counting" of service is only as to the participants employed on the date of the amendment who actually had hours of service in the requisite periods. In an attempt to simplify what I just said.... I think the double counting is solely for the purpose of determining the year of service for the short plan year period. I would think that the employee hired after 12/31 would be subject to the plan's normal 1,000 hours of service = 1 year of service (assuming that to be the case) rule and there would be no short year issues concerning that employee.....

[Guest RBlaine]

chris, thanks for the reply. That is my thought as well, but it suddenly occured to me that I should ask around, just in case.

[david rigby]

Maybe, but it might be more important to see what the plan says.

The facts in the original post appear to be what the regulatory requirement is for vesting service (which applies to employees, not participants), but may not be required for other types of service.