Reciprocity

[Guest BRich]

We have the following problem with a reciprocity arrangement:

Home fund provides $4 per hour contribution to DB Plan. Away fund provides $10 per hour contribution to DC Plan. Employee works away for 6 months and then returns. Away fund forwards $10 per hour to Home fund per the reciprocity agreement. Employee, recognizing the contribution difference, demands that he receive the excess ($6 per hour).

We don't anticipate a problem with the transfer of funds from DC to DB since it's a conduit / "money follows the man" agreement.

However, the reciprocity agreement and the plans are silent on the issue of excess amounts contributed by the away fund. The home fund has always kept any excess since many of the other away funds contribute less than $4 per hour. The excess amounts and the shortfalls generally offset each other.

Is there any official guidance out there that could settle the dispute between the employee and the home fund?

[JanetM]

So based on the union workers logic, if he goes to an away plan whose DB formula is $3 per hour is he going to come up with the $1 to make his benefit whole? If he doesn't have to make up the shortfall he doesn't profit by the overage.

[Effen]

I can't speak to the wording of the reciprocity agreement, but the plans I work with prorate the service credit based on the difference in the contribution rates. In other words if they are normally credited with $3/hour and they receive $10/hour, they would be credited with 3.33 hours for every hour actually worked. This would work both ways so if the traveling rate was lower than the home rate, they would receive less credit than they actually worked.

I think this only applies to benefit service; vesting service may be handled differently.