Benefit Accrual Service under Elapsed Time Method

[JWK]

If a plan determines benefit accrual service using the elapsed time method, do you have to credit partial years of service? You don't have to credit partial years for vesting (1.410(a)-7(d)(1)(iv)), but what about for benefit accrual? And if you do have to count partial years, how do you calculate the service? Days between employment commencement date and severance from service date divided by 365? If you have a cite to a reg, I'd appreciate it.

Thanks.

[Wessex]

There is no requirement to pro rate for partial years, although it is permissible. If partial years are to be credited, the plan document must so provide and should also specify how the partial year is to be determined. I have seen, for example, 1/12 of a year for each calendar month and 1/12 of a year for each 30 days.

[JWK]

I did a small survey among benefits professionals I know, and they all stated that partial years of service must be credited for benefit accrual purposes under the elapsed time method. Is there a consensus that this is correct?

[Wessex]

I believe I was mistaken and it is correct that partial years must be taken into account. See the last sentence of Department of Labor Regulation Section 2530.204-3.