QSLOB and service between employers

[BW]

A foreign corporation has two U.S. subsidiaries. Corp A and Corp B which are treated as QSLOB's. Periodically an employee will terminate from one QSLOB and be hired by the other. Each Corp has its own management, payroll, benefit Plans etc.

The plans grant predecessor service for eligibility and vesting.

The questions:

If employee leaves Corp A and is immediately hired by Corp B should vesting service continue under the Corp A plan? Currently Corp A would treat the employee as terminated.

All the QSLOB rules I've read deal with testing but I find no exemptions for related companies as it relates to service and vesting credit. Should the "termination" even be treated as a distributable event?

[My 2 cents]

Doesn't service with any member of the controlled group count for vesting purposes?

Based on my understanding, the answer is no, "terminating" from one controlled group member is not a distributable event when the employee remains in employment with any other controlled group member. The employment relationship must be severed with respect to the entire controlled group. I may be wrong, but I don't think that going from A to B would be considered a separation from service at all. Accruals might cease but that does not make it a separation from service.

[BW]

That's my take as well. It seems to me that vesting credit should also continue under Corp A's plan.

[ESOP Guy]

I will admit QSLOB rules are not a strong point of mine. However, I thought QSLOB rules are a defined in and only a part of coverage testing rules and coverage testing rules only.

[My 2 cents]

I will admit QSLOB rules are not a strong point of mine. However, I thought QSLOB rules are a defined in and only a part of coverage testing rules and coverage testing rules only.

I wouldn't think that they would affect actual benefit administration.

[ESOP Guy]

I will admit QSLOB rules are not a strong point of mine. However, I thought QSLOB rules are a defined in and only a part of coverage testing rules and coverage testing rules only.

I wouldn't think that they would affect actual benefit administration.

Maybe I wasn't clear enough. But that was my point. If the QSLOB rules only apply to coverage then they don't apply to issues like vesting.