Enrollment forms for rehire

[pam@bbm]

Would like to know how others handle enrollment/election forms for rehires. My understanding is that when a participant terminates employment their deferral election becomes void. Upon rehire, they should receive new forms and make a new election. Am I correct?

[hr for me]

Probably best business practices, but you might want to make sure what your default parameters in your payroll processing system are. I know ours defaults to restart whatever the last elections were and I would have to override them to stop them.

[GMK]

If the Plan Document says something about deferral elections for rehires, then do what it says.

In any case, as hr for me says, check on what, if anything, the payroll processing system does.

Whatever the procedure you end up using, make a note of it so that the Participants and you and your successors know what to expect.

For example, it could be a note on or with the election form that says, "If your employment with our fine company terminates, your deferral election becomes void. If you are later rehired, your deferral election will be the default deferral rate in effect at that time unless you file a different deferral election." or "Your deferral election will change only when you file a new deferral election. Changes in your employment status do not change your deferral election."