Terminated employee with remaining vacation days

[Guest Giovanni]

For a calendar plan year, suppose an employee's last day at work is Dec 24th yet gets paid through Dec 31st because he had several vacation days he hadn't used. So he physically did not go to work after Dec 24th, yet received a paycheck in the mail in Jan for days through Dec 31st. He chose to use his remaining vacation days during the last week of Dec rather than go to work. The plan has a last day requirement to receive a match. Does he get the match?

[E as in ERISA]

I think that it depends on whether the employer marks the termination date as December 24 or December 31 on the payroll and benefits records. I think that employers do it both ways. And the IRS has said that they don't have rules governing when the termination must be deemed to occur. As long as they are consistent throughout the year on how they do it so it doesn't look like they are trying to avoid paying benefits, I think that it's fine to make it December 24.

[Guest nsacramento]

Truly I think the plan document needs to be referred to in this situation. Most plans will state whether the person must be active on that date in order to be eligible. If the employee is considered as being active on 12/31 (being on vacation for many employer's is considered as being active), then he would be eligible for the match.