If a plan has age and service requirements more liberal than the statu

[Hoard1]

If a Plan has an age & service requirement less than the statutory minimum can it still use 21 & one year of service for the exclusion under 410(B)? Any cites?

[Guest]

try

1.410(B)-7©(3) and then reference 401(a)-(1)(A)(i) and (ii)

as well as 410(a)(4) for time of participation.

[Hoard1]

410(a)4 outlines time for participation. If an employee separates from service prior to first day of plan year or date six months after when would they participate if rehired in next plan year. Date of rehire, next entry date or some other time.

Thanks

[Hoard1]

To answer my own question ... .1.410(a)-4(B)(ii).. if the employee has not incurred a break in service they must commence participation immediately upon return. I've seen documents that say rehires commence participation on the next entry date. Is this ok? Also, does the fact the employee has not completed 12 months of consecutive service have an impact on this situation.

[Guest]

ee needs to work 1000 hours in the twelve month period from date of hire, then you switch to plan year.

so it shouldn't matter if their consecutive or not.

as to date of re-entry, document should be the guidance, since there are various break-in-svc rules that could apply.

I looked this one up the other day - under the 1 year break in svc, ee retroactively reenters after completing 1000 hours. in a 401k plan, that means couldn't defer until he completes 1000 hours, but now you retroactively enter! Impossible to do! and there is no real guidance, so document should specify date when ee can begin to defer again. if you have a determination letter then you should be able to rely on it.

hope that helps a little, the big problem is break in svc rules were written prior to the explosion of 401(k)

[Guest jaseed]

This came up under an IRS examination, and the Revenue Agent considered the rehired participant immediately eligible, even though the plan document stated otherwise. This plan has 1 yr. of svc. quarterly entry. In accordance with the IRS 'fix' excluding an eligible employee, once an employee satisfies the age and svc and is still employed on their entry date, they will be considered a rehired participant eligible for immediate entry thereafter. Needless to say, the doc. also needed to be amended to operate in accordance with the Code.