Eligibility

[cdavis25]

We have a client using the VS Corbel document. They selected 18 and 6 months of service for eligibility with quarterly entry. The document reads,

Months of service. For purposes of this Section, an Eligible Employee will be deemed to have completed the required number of months of service if such Employee is in the employ of the Employer at any time after such months after the Employee's employment commencement date. Employment commencement date shall be the first day that the Employee is entitled to be credited with an Hour of Service for the performance of duty.

They have an employee (over 18) that was hired 5/15/12, terminated 8/15/12, rehired 10/15/12, terminated 10/20/12, rehired 12/14/12. Would that person be eligible on 1/1/13?

[Bird]

I think you have to read it literally - so the answer is yes.

[Kevin C]

When you are using elapsed time to determine service, there is a rule covering terminations when the participant rehires within 12 months.

1.410(a)-7(a)(3)(vi)Service spanning.—

Under the elapsed time method of crediting service, a plan is required to credit periods of service and, under the service spanning rules, certain periods of severance of 12 months or less for purposes of eligibility to participate and vesting. Under the first service spanning rule, if an employee severs from service as a result of quit, discharge or retirement and then returns to service within 12 months, the period of severance is required to be taken into account. Also, a situtation may arise in which an employee is absent from service for any reason other than quit, discharge, retirement or death and during the absence a quit, discharge or retirement occurs. The second service spanning rule provides in that set of circumstances that a plan is required to take into account the period of time between the severance from service date (i.e., the date of quit, discharge or retirement) and the first anniversary of the date on which the employee was first absent, if the employee returns to service on or before such first anniversary date.