Service with another employer

[R. Butler]

Employer A & Employer B have common ownership, but not sufficient to be a controlled group. They aren't an affiliated service group either. They each sponsor their own plan.

Every so often employees will switch between the two companies. Is there any issue with each plan recoginizing service with the other employer? These aren't really predecessor employers, but I don't see an issue with it. Want to make sure thay I am not missing something though.

Thanks in advance for any guidance.

[david rigby]

Multiple-employer plan?

[12AX7]

I don't see an issue with having predecessor service recognized in each plan. I wouldn't necessarily suggest converting to a multiple-employer plan if this were not a common occurance.

[Kevin C]

I don't see any issue with it either. We have a few clients in the same situation that grant service credits.

Our VS document defines Predecessor Employer as "An employer that previously employed the Employees of the Employer". If the Employer maintains the plan of a Predecessor Employer, service with that Predecessor Employer counts under the plan. Otherwise, the predecessor service only counts if it is designated in the adoption agreement.