Each in Own Group

[austin3515]

But the groups are operationally defined as follows:
People with More than 10 YOS get 10%
People with More than 5 YOS get 5%
People with Less Than 5 YOS get 0%

Please tell me the consensus is that this violates ERISA. Prior TPA said "No, it's ok because everyone is in their own group."

[Lou S.]

I think you have a disguised 5 year eligibility requirement for the PS in operation.

[austin3515]

In order to "prove my point" to my client I'd love to point to something in writing. I can't believe this has not been addressed somewhere by now...

[Mike Preston]

You want to look at the regs under 410(a). I thought there was an example that was almost directly on point. It may be that the example is under 410(b) but it references 410(a).

[austin3515]

Ahh this is that "drivers license for 10 years" disguised age requirement - I'm on it!

[austin3515]

CFR 1.410(a)-3 - Minimum age and service conditions.

(references age 25 strangely enough?? Apparently the regs have not been updated in a long time?(

Example 1.

Corporation A is divided into two divisions. In order to work in division 2 an employee must first have been employed in division 1 for 5 years. A plan provision which required division 2 employment for participation will be treated as a service requirement because such a provision has the effect of requiring 5 years of service.

HEre is the drivers license one:

Plan B requires as a condition of participation that each employee have had a driver's license for 15 years or more. This provision will be treated as an age requirement because such a provision has the effect of requiring an employee to attain a specified age.

THANKS!