eligibility for employee who was in a class not eligible to participate

[Guest scamacho]

We have an employee who was in a class not eligible to participate in our 401(k) plan when she was hired. She worked under 500 hours and terminated August 2004. She will be rehired in August 2005 and will be in a class eligible to participate in the 401k plan. Eligibility for the match portion of the plan is 1 year of service. The plan has semi-annual entry dates and no break in service. Should her prior hours be counted towards eligibility for the match?

[Jim Chad]

You might check to see if the document addresses this. But it is my understanding that all service with this employer counts whether a person is in an eligible or excluded classification of employees.

[Guest THess]

I assume that the 12 month requirement also has the 1000 hours (during that 12 months) requirement?

If so, it doesn't sound like she ever met the eligibility requirements anyway. If she never met the eligibility requirements, then she starts over.

Then, you need to look in the document for the "initial eligibility" requirements. After the first year (based on the anniversary of date of hire), what does the next year use? It will be one of two....either continues to be based on date of hire, or changes to plan year. So in determining whether someone meets eligibility, you will know what period you are looking at. (In this case August to August, or plan year.)