Future Service Credit

[Fisher]

Can 2 unrelated employers recognize both past and future service with each other for vesting purposes?

I know service is recognized within a Controlled Group and/or Affiliated Service Group. However, if there is a relationship or similar business interest between 2 separate unrelated tax-exempt organizations, could service after separating from one be recognized for vesting purposes if immediately go to work for the other?

Both Company A and B will be recognizing service for eligibility, contributions and vesting with each other, but what if an employee terminates company B and goes to work immediately for company A, if the employee is not fully vested in B, can they recognize service with A for vesting service credit and not create a forfeiture until such time as they may terminate from A or vice versa?

[MoJo]

Can 2 unrelated employers recognize both past and future service with each other for vesting purposes?

I know service is recognized within a Controlled Group and/or Affiliated Service Group. However, if there is a relationship or similar business interest between 2 separate unrelated tax-exempt organizations, could service after separating from one be recognized for vesting purposes if immediately go to work for the other?

Both Company A and B will be recognizing service for eligibility, contributions and vesting with each other, but what if an employee terminates company B and goes to work immediately for company A, if the employee is not fully vested in B, can they recognize service with A for vesting service credit and not create a forfeiture until such time as they may terminate from A or vice versa?

I have the same question. In my case, however, an employer/plan sponsor wants to give vesting service credit to individuals who jump from a competitor to them. Interesting recruiting tool.....

[BG5150]

I have the same question. In my case, however, an employer/plan sponsor wants to give vesting service credit to individuals who jump from a competitor to them. Interesting recruiting tool.....

The EOB seems to think it's okay to do that. But be careful of stuff like that happening only to HCEs.

(Chapter 4, section IV, Part F2, 2(f))

[MoJo]

I have the same question. In my case, however, an employer/plan sponsor wants to give vesting service credit to individuals who jump from a competitor to them. Interesting recruiting tool.....

The EOB seems to think it's okay to do that. But be careful of stuff like that happening only to HCEs.

(Chapter 4, section IV, Part F2, 2(f))

Thanks BG, I appreciate it!

[Guest GeerTom]

This is not "ordinary" so you'll have to look out for discrimination, if HCEs move back and/or forth too much. Otherwise, it is permitted because it's not forbidden.

[dal1204]

Could someone tell me where I find EOB Chapter 4, referred to in this thread?

[John Feldt ERPA CPC QPA]

http://www.asppa.org/Resources/Publications/The-ERISA-Outline-Book

[dal1204]

Thanks so much! Any thoughts about where the resource may be available other than through purchase?

[John Feldt ERPA CPC QPA]

I think most firms that provide administrative services for qualified retirement plans would either have electronic access to the EOB or they have a paper copy of the eight-volume book on a shelf (or both).