2 year Military Leave

[Lori H]

An employee went on military leave during calendar year plan 2003 after working 1560 hours. He received a profit sharing allocation and QNEC for that py. For py 2004 he received no income however the plan made QNEC/QMAC/PS/Match contributions. 2005 py the employee came back to work, clocked in 560 hours and received a QNEC/PS allocation.

The employee was on 2 year military leave so he would have 5 years to make up any elective contributions he would have been entitled to make.

The employee received PS/QNEC/QMAC in 03 and 05 based on actual hours worked and comp received. My question is would the employer have to: 1) make additional contributions for the 2003, 2004 and 2005 plan year based on the hours the employee would have worked had military leave not occurred and 2) if the employee decides to make up deferrals within 5 years, then the employer must match those deferrals, if not he receives just a QNEC/QMAC/PS?

[Guest Pensions in Paradise]

Correct. Don't forget you must base his compensation on the amount he would have earned had he not been on military leave. So you need to take into account any pay increases, bonuses, etc. he would have otherwise received.

[Lori H]

let me ask this, in 2003 he received a contribution, however he left for iraq in 03, is the employer obligated to make up additional funding based on comp he would have earned in 2003? same situation applies when he came back in 2005 with a 5% pay increase. For 2004(no earnings) the employer would have to make up the profit sharing AND QNEC/QMAC contributions? Finally, I understand the employer does not have to make up earnings, but how long does the employer have to fund ps and QNEC/QMAC if applicable?

Basically, is the employer responsible for additional 2003. 2004 and 2005 employer contributions?

[Lori H]

The employee is not making up deferrals, but is there any defined period of time that the employer has to fund the ps and if applicable qnec/qmac contributions to the trust? I have not seen anything in reference to a time period. I just know they are not required to make up any earnings.

[Guest Pensions in Paradise]

From what you have described, the employer must make up PS/QNEC/QMAC contributions for 2003, 2004, and 2005. Deadline to fund these amounts is 90 days after the reemployment date.

The ERISA Outline Book has a nice checklist regarding USERRA. Chapter 15, Section IV, Part J (2006 Edition).

[Lori H]

Thank you kindly, PiP