Do sabbaticals count for service?

[Guest ddv]

If professors are given paid time off each year to go on monthly (or longer) sabbaticals, do they earn hours of service for allocation and vesting purposes? The school states that they are given sabbaticals to go research, meditate, etc. and feels that they should be given service while they're away. Any help would be greatly appreciated.

[QDROphile]

The inevitable first question: What does the plan say?

It is permissible under tax rules to credit sevice while on leave of absence. It is mandatory under most circumstances if the employee is being paid for the time.

If you are exploring what is permissible or mandatory rather than trying to answer a question under a particualr plan, you may find different answers depending on whether the school is public or private. Public entities are subject different tax rules, are not subject to ERISA, but have to comply with state law.

[Erik Read]

Add - to play devils advocate - what do you do when the plan specifies hours worked as performing service for the sponsor - not specifically compensable.... then does vacation/sick/sabbatical/paid holidays/personal days all come out for purposes of elig and vesting??????

I love these questions!

[Locust]

If it is not a governmental or church plan, hours not worked but for which payment is made (vacation, sick leave, etc.) have to be credited up to 501 hours for all purposes. This is an ERISA rule. Look at the the Plan's definition of "hour of service" - the rule should be right there. Governmental plans - that would be determined by the plan document or state statute.

[JDuns]

If the employee receives a paid sabbatical, the DOL rules (as cited by Locust) require crediting with up to 501 hours.

If the sabbatical is more than 501 hours or unpaid, the service crediting rules do not require crediting service. If the plan chooses to credit service in excess of the rules, the service must be tested for non-discrimination (see 1.401(a)(4)-11(d)).