profit sharing allocation to rehired retiree

[pmacduff]

too early in the year to be confused and yet I am. hmmmm...

anyway - I have a cross-tested profit sharing allocation formula.

allocation conditions for active participants are 1000 hours, last day rule.

If termed due to death, early retirement, retirement or total and perm. disability then hours/last day requirements waived for allocation. Plan is not top heavy.

Participant termed in 2012 under the early retirement provions - was over 55 and had 10+ YOS. Participant received an allocation in the year of early retirement. Same participant rehired 11/23/2015. Active on rehire. Participant had 243 hours in 2015 and was employed on the last day.

Is participant excluded from the profit share allocation or no?

appreciate any feedback....

[BG5150]

Not 1,000 hours. So, no. Person is no longer retired.

[ESOP Guy]

I agree not a retire as you describe it.

[ETA Consulting LLC]

I agree, but for a different reason. They ARE rehired because they are back at work. I think your terminology meant that they simply failed to meet the 1000 hour accrual requirement for the year.

Also, to your point, the plan may have contained a provision requiring a year of service upon rehire with retroactive entry to date of rehire. Even then, they would still have failed to meet the accrual requirements for receiving a contribution.

The only issue would seem to be when would you include them in the test as not excluded and not benefiting.

Good Luck!

[Tom Poje]

another possibility, possibly missed because you are looking at other things,

if plan is top heavy (pretty common for cross tested plans) then the person receives the top heavy and gets bumped to the gateway

[pmacduff]

Tom - you may have missed it becasue you are busy as well but I did mention in the OP that the plan is not top heavy because I knew if he was getting a top heavy I would bump him up to the gateway.

But since no top heavy, I wanted to be sure that he doesn't get a regular contribution.

thanks to all!!