unvested participant is rehired

[cpc0506]

Employee A received a profit sharing contribution in 2012. In 2013 the employee terminated employment 0% vested. She only had 1 YOS. Plan forfeits her unvested balance as of 12/31/13.

Employee A is rehired on July 15, 2015 and is still employed as of 12/31/15. Employee A is not entitled to a profit sharing contribution as she only worked 528 hours and plans requires 1000 hours for contribution.

Should the unvested funds be restated as of 12/31/15? If so, how is that done. Just an FYI, the profit sharing funds are pooled (employer directed). If not, when must they be restated?

[E as in ERISA]

What does the plan say? It should prescribe the "deemed cash out" rules. And then should provide for an immediate "repayment" and restoration upon the employee's return to employment without a five year break in service.

[My 2 cents]

Can the plan require the completion of a year of service (i.e., a plan year with 1,000 hours) before things happen after rehire?

[cpc0506]

It looks as if our Basic Plan Document says the deemed cash out needs to be returned to the participant in the year of her rehire.

[My 2 cents]

It looks as if our Basic Plan Document says the deemed cash out needs to be returned to the participant in the year of her rehire.

What, the deemed cash out of the $0 vested amount? In a deemed cash out, no money would actually have been paid to the participant (wouldn't be "deemed" if there was any money paid), and in any event, wouldn't it be the participant who would have to return the deemed cash out of $0 to the plan? Perhaps your plan says that the amount that was deemed to have been forfeited in connection with the deemed cash out of $0 has to actually be put back into the participant's account.

[cpc0506]

That is what I meant to say.