When do you start calculating break in service?

[Guest fcdeacy]

Scenario:

Employee worked for 10 years at Company A and terminated in 1992. The employee was paid out his accrued benefit in 1999(lump sum). The employee then rehires in 2002 and works until 2004.

Under regulations, would the employee be entitled to vesting for his prior service(1992 and prior years)?

Would the employees break-in-service go back to his original termination date(1992) or would the employees pay-out date be the "adjusted" break-in-service start date which means the employee would not have a 5, 1-year breaks in service?

Any help provided would be much appreciated!!!!!

Thanks,

Fred

[Blinky the 3-eyed Fish]

Under regulations, would the employee be entitled to vesting for his prior service(1992 and prior years)?

Yes, the rule of parity, which can cause a permanent loss of prior years for vesting only applies if the participant was 0% vested. This is not the case here.

Would the employees break-in-service go back to his original termination date(1992) or would the employees pay-out date be the "adjusted" break-in-service start date which means the employee would not have a 5, 1-year breaks in service?

While the answer to this question is apparently moot, a break-in-service is generally defined as a period in which an employees works less than 501 hours. When the participant was paid out has no bearing.