Eligibility

[Guest elang]

Situation: Plan YE = 6/30/11. Eligibility req = YOS. Entry Date - Single Entry 7/1. Participant was Terminated in 2002 and was 100% vested. Rehired on 11/15/10. Is she immediately eligible or does she need to re-meet eligibility requirements. Thanks in advance for your help.

[ESOP Guy]

The best way to answer this question is to go and read you document’s eligibility sections. I can’t remember ever reading a document that doesn’t answer the question of how to handle rehires.

[Kevin C]

Situation: Plan YE = 6/30/11. Eligibility req = YOS. Entry Date - Single Entry 7/1.

On another note, those are interesting plan provisions. When would someone hired full time on 8/15/2011 enter the plan?

[Guest elang]

Situation: Plan YE = 6/30/11. Eligibility req = YOS. Entry Date - Single Entry 7/1.

On another note, those are interesting plan provisions. When would someone hired full time on 8/15/2011 enter the plan?

7/1/2013; here is the service provision:

For purposes of Non Elective Contributions, after having completed a Year of Service, an Employee shall begin participation on the first Entry Date following the six month anniversary of his or her Employment Commencement Date with the Employer provided, however, that he or she shall become an Eligible Employer no later than upon the completion of 1,000 Hours of Service within a 12 consecutive month period and the attainment of the minimum age requirement, if any.

[Bill Presson]

Situation: Plan YE = 6/30/11. Eligibility req = YOS. Entry Date - Single Entry 7/1.

On another note, those are interesting plan provisions. When would someone hired full time on 8/15/2011 enter the plan?

7/1/2013; here is the service provision:

For purposes of Non Elective Contributions, after having completed a Year of Service, an Employee shall begin participation on the first Entry Date following the six month anniversary of his or her Employment Commencement Date with the Employer provided, however, that he or she shall become an Eligible Employer no later than upon the completion of 1,000 Hours of Service within a 12 consecutive month period and the attainment of the minimum age requirement, if any.

I say 7/1/2012. Completes the year of service on 8/15/12 and would enter on the "first Entry Date following the six month anniversary of his or her Employment Commencement Date". That date is 2/15/12 and the first entry date is 7/1/12.

This appears to approximate a one year; nearest entry date provision, but it's pretty crappy wording if you ask me.

[Tom Poje]

assuming the plan operates under the 'rule of parity' the IRS response at the ASPPA Conference last year was:

If there is a vested amount, prior service cannot be disregarded, even if the vested account is

attributable to deferrals. IRC 411(a)(6)© and (D). However, if there is a vested percentage,

but no vested amount (i.e., no deferrals made in this example), the rule of parity does permit

prior service to be disregarded.

If the plan operated under the 1 yr break in svc then you have to wait a year before you can enter,but the entry is retroactive to date of hire. so that botches everything up because you can't defer on the comp you earned a year ago. Because of that, I believe the IRS has voices an opinion you can't use a 1 year break rule if deferrals are involved

[Guest elang]

Situation: Plan YE = 6/30/11. Eligibility req = YOS. Entry Date - Single Entry 7/1.

On another note, those are interesting plan provisions. When would someone hired full time on 8/15/2011 enter the plan?

7/1/2013; here is the service provision:

For purposes of Non Elective Contributions, after having completed a Year of Service, an Employee shall begin participation on the first Entry Date following the six month anniversary of his or her Employment Commencement Date with the Employer provided, however, that he or she shall become an Eligible Employer no later than upon the completion of 1,000 Hours of Service within a 12 consecutive month period and the attainment of the minimum age requirement, if any.

I say 7/1/2012. Completes the year of service on 8/15/12 and would enter on the "first Entry Date following the six month anniversary of his or her Employment Commencement Date". That date is 2/15/12 and the first entry date is 7/1/12.

This appears to approximate a one year; nearest entry date provision, but it's pretty crappy wording if you ask me.

7/1/2012 is correct (2013 was a typo)

[Kevin C]

That is eligibility/entry for the non-elective portion of the plan. What is it for deferrals? You posted in the 401(k) section, so I was thinking about deferrals. Retroactive entry doesn't work too well with deferrals.

[ESOP Guy]

Learned something new today. I really thought you could not answer this question without reading the document and knowing how it is written.

Although we aren't told if with is a 401(k) plan or a PS plan. It would make a big difference.

But I went back and re-read the whole rule of parity stuff again.

Thanks Tom.

Edit:

In my defense I would add, one could always answer this question by reading the document.