Last Day Rule Issue

[Guest slufoot2000]

Hello,

I submitted my resignation with my former employer in late October, 2003. In my resignation email, I stated my last day would be January 1, 2004. My former employer agreed to this resignation date (via email). During the month of December 2003, my former employer asked me several times to assist the company by working 2 weeks into January, 2004. I agreed to this extension and arranged my schedule to accommodate him.

On December 30, 2003 I was working my regular shift (3pm-midnight) and my employer arrived into the office around 7pm and told me he had decided to let me go tonight. I told him I wanted to work into January and he said this is the last night I will be working. He prepared a resignation letter for me to sign and cut me my final paycheck.

My former employer now will not provide the my 2003 contributions. Although I worked in excess of 1000 hours of service, he states per the terms of the plan I resigned 1 day short of the plan year.

My first question is under the "hours of service method", will my 1000 hours of service override this Jan 1, 2003 to Dec 31, 2003 plan year.

Also, do fellow members see a good case for arbitrary and capricious intent on behalf of my former employer to deceive me of my profit sharing plan benefits.

My total employment was from 5-11-2000 to 12-30-2003.

Thanks,

Slufoot2000

[rcline46]

Were you scheduled to work Dec 31 3pm to midnight? New Year's eve? If not then you did work the last scheduled day and in my opinion are entitled to the contribution.

Second, you may have a breach of contract suit since you were asked to work into january and the contract changed.

Third, it IS a breach of ERISA 510 to cause an action expressly to deny benefits.

You need to contact an ERISA attorney or take this up with your local PBWA (DOL) office. Legal counsel is your only recourse.

[Guest slufoot2000]

rcline46 -

Yes, I was scheduled to work both New Years Eve (12/31/03) and New Years Day (1/1/04). I have the original email which I submitted to my employer in October 2003 regarding my resignation scheduled on January 1, 2004. I also have access to a former employee which overheard the many verbal requests made by my employer asking me to work a few weeks into January, 2004. I was training this individual to replace me. He is no longer with the company and is willing to testify to this.

Will the DOL assist me in looking into this issue or should I focus all of my attention on finding an attorney and filing a suit?

Thanks,

Slufoot2000

[david rigby]

Good advice to contact an attorney experienced with ERISA. If you contact the PWBA, remember the name of that agency is now the Employee Benefits Security Administration.

http://www.dol.gov/ebsa/

You will certainly need a copy of the plan document, especially to confirm it has a last-day rule.

I am not an attorney, but I thought that a resignation letter did not require the employer to retain your services as long as you desire, but as long as the employer desires.

[rcline46]

Several issues:

State law governing employment ('at will' state or not);

Yes, it now is the EBSA;

You do need a copy of at least SPD or document;

How much will you get considering vesting vs. cost of attorney;

Remember ERISA is a FEDERAL case (could get atty cost back if you prevail).

Unreasonable termination will be VERY difficult to prove - was position actually eliminated? Did employer have cause - ie you were causing problems for the employer with other employees due to resignation, bad mouthing the working conditions, etc?

All of these issues point to why you need to engage an attorney whose main practice is ERISA.

[Guest slufoot2000]

pax-

The plan does not contain a "last day rule".

rcline46-

I don't believe "unreasonable termination" will be the action which we will file suit for. My position was not eliminated nor was I causing issues with other employees. I believe the main suit may be filed for fraudulent misconduct on behalf of the employer to deceive/defraud me of my contributions under the plan.

Two other questions-

1. As the plan administrator, does my employer have a fiduciary responsibility to verbally tell me that by signing the resignation letter one day early, I will give up my contributions due me under the profit sharing plan? How about putting this directly into the resignation letter to make me aware of exactly what I'm giving up? Neither one was explained to me.

2. How about the 1000 hours of service compared to the "plan year" computation period? Does my 1000 hours take precedence over this Jan 1 to Dec 31 plan year rule?

Thanks,

Slufoot2000

[Guest SheilaLuken]

Slufoot2000,

Does the plan SPD outline a claims procedures? There should be a procedure that you can follow to appeal their decision. They will then be required to provide you with the plan provisions that they relied upon to deny your benefit. The SPD is the primary means of communication with respect to your rights and responsibilities under the plan. Your employer is not required to provide you with this information again when discussing your resignation.

[rcline46]

Sheila gave you excellent starting advice. File a claim under the claims procedure. The procedure has built in deadlines so you cannot be stonewalled. I would specifically refer to the SPD where you think no end of year applies.

As to the 1000 hr/ plan year / end of year relationships I would have to read the actual document (and any amendments) to see what they are for your plan.

[Guest slufoot2000]

SheilaLuken-

I initially had emailed my former employer my admin claim for benefits, to which he denied it pointing out a specific page of the plan which outlines that I must be employed on the last day of the plan year, December 31, 2003. The plan states:

"The Plan's records are maintained on a twelve-month period of time. This is known as the Plan Year. The Plan Year begins on January 1 and ends on December 31. Certain valuations and distributions are made on the Anniversary Date of the Plan. This date is the last day of the Plan Year."

This correspondence with my former employer is all via email. Should I still send a certified letter with my admin claim request to him or will this email suffice?

My other question may be far reaching but since my last day was December 30, 2003 and I worked the night shift from 3pm to midnight, would this technically mean that I worked until December 31, 2003?

Thanks,

Slufoot2000

[TBob]

"The Plan's records are maintained on a twelve-month period of time. This is known as the Plan Year. The Plan Year begins on January 1 and ends on December 31. Certain valuations and distributions are made on the Anniversary Date of the Plan. This date is the last day of the Plan Year."

I do not read this as saying the plan has a last day provision for receiving the profit sharing allocation. That is not to say that the plan does not have a last day provision. You still need to look in the SPD for something that says "you must be employed on the last day of the plan year to receive..."

[Guest slufoot2000]

TBob-

I have read the entire plan and it does not state anything about "you must be employed on the last day of the plan year to receive..."

It does state several times about the 1000 hours of service rule for vesting purposes. My former employer agrees about my full 4 years of vesting but goes back to the Jan 1 to Dec 31 rule for appropriate allowable contributions to be made.

Thanks,

Slufoot2000

[Guest MikeD]

The language that was quoted appears to be from a Corbel SPD. Look for questions in the SPD entitled "What is the Employer's matching contribution?" and "What is the Employer's profit sharing contribution?" In those sections, the SPD will state whether there is a last day of the year requirement or not.

[Guest slufoot2000]

MikeD-

Very interesting. When looking for the "How much will the Employer contribute to the plan", the entire page is missing from the SPD. Its skips from page #2 to page #4. On page #4 it states under "How will my Employer contributions be allocated to my account?" as:

"Our discretionary profit sharing contribution will be "allocated" or divided among participants eligible to share in the contribution for the Plan Year. (See the question in this Article "How will the Employer contribute to the Plan?" to determine if you are eligible.)"

This article is located on Page #3, which is missing from the SPD.

Thanks,

Slufoot2000

[Guest MikeD]

MikeD-

Very interesting. When looking for the "How much will the Employer contribute to the plan", the entire page is missing from the SPD. Its skips from page #2 to page #4. On page #4 it states under "How will my Employer contributions be allocated to my account?" as:

"Our discretionary profit sharing contribution will be "allocated" or divided among participants eligible to share in the contribution for the Plan Year. (See the question in this Article "How will the Employer contribute to the Plan?" to determine if you are eligible.)"

This article is located on Page #3, which is missing from the SPD.

Thanks,

Slufoot2000

That page will answer your question about a last day of the year requirement. Request it from your former employer.

[Guest slufoot2000]

MikeD-

I will ask for this page from the employer.

By excluding this page, does this violate the fiduciary responsibilty for the employer to furnish all SPD material to me? Hopefully, the ESBA will be able to handle this issue without the need for an outside attorney.

Thanks,

Slufoot2000