Credited Service

[Gary]

A small company merges nto another small company.

The new small company now adopts the plan and the first plan year is to be a short plan year from 4/1/07 to 6/30/07 with each subsequent plan year from 7/1 to 6/30.

In order to receive a year of credited service the plan requires 500 hours during a plan year.

As far as I can see, if the participant works 500 hours during 4/1/07 to 6/30/07 then the participant can recieve one year of credited service.

Does anyone have concrete evidence indating otherwise?

Thanks.

[Guest Carol the Writer]

Why wouldn't you pro rate the hours for the short plan year? Were 2000 hours required for a year of credited year of service under the merging plan? Thanks! Carol

[John Feldt ERPA CPC QPA]

What are the terms of the plan for short plan years?

[david rigby]

Right!

If the plan is ambiguous on how to handle the short plan year, amend away the ambiguity. For example, credited service may be different from vesting service.

[Gary]

The plan provides for a year of credited service, but I was wondering if there was any statutory provision that would preclude from accruing a year of credited service in a 3 month plan year.

Thanks.