Military leave of absense

[jkharvey]

Is this a separation of service/termination for purposes of getting a distribution from the plan?

[Belgarath]

Depends upon the plan language. I think perhaps it CAN be, although I don't know whether or not folks are including this in their documents, and if so, is the IRS approving them. I'm not certain if a general USERRA statement is sufficient, (you know, something along the lines that regardless of other provisions in the plan, the plan will provide benefits in accordance with 414(u), etc) or if it would need to be stated more explicitly. I'd want to err on the side of explicit...

At any rate, the DOL reg. 20 CFR 1002.149 seems to indicate that a plan can't refuse to provide USERRA benefits just because the plan treats the participants as "terminated" so it seems like for some items, being considered as terminated is ok. However, to me this language is gray enough that I wouldn't want to rely on it, but would want an IRS approved document to explicitly state it.

I'll be interested to see what others think.

[GMK]

Interesting question.

I think the participant would have to actually be terminated. I doubt (don't know for certain) that a person on any leave can be "considered" terminated for Plan purposes, unless, as Belgarath suggests, you have explicit approval of such language.

USERRA guarantees reemployment, reinstatement of insurance coverage, pension plan benefits, etc. to Qualified Reemployed Employees. If a participant returns to work as a qualified reemployed employee, she/he can (must) be reinstated as prescribed by USERRA whether they were on leave or terminated.

If the participant is requesting a distribution, a hardship distribution, if available, might be easier.

[GMK]

If this is a 401(k) (or similar), the participant might qualify for a qualified reservist distribution.