Vesting - Switching from counting hours to elapsed time

[Mr401k]

One of my plans currently requires 1,000 hours of service in a plan year (calendar) to receive a year of vesting credit. Client is considering changing to elapsed time. The current six-year schedule will remain. Do I have this right, regarding a mid-year change?

• Credit that was already granted for years prior to 2016 will remain unchanged -- based on counting hours, not elapsed time.
  
• Anyone who has any hours of service at the time of the change this year will receive a year of vesting credit if they complete 1,000 hour in 2016 -- regardless of whether they reach that number of hours before or after the change.
  
• Anyone who reaches his 2016 anniversary date after the change will receive a year of vesting credit.
  
• Potentially, then, a participant could receive two years of vesting credit during 2016: One for completing 1,000 during the year, and another for reaching his anniversary date by the end of the year -- assuming the anniversary date is later in the year than the effective date of the change.

Or do I have this all wrong?

Thanks for your help!

[My 2 cents]

Your approach would probably be necessary if you were changing the measurement year. If you are only changing the way to determine how much vesting service was earned in a given measurement year, it would probably not be necessary to double count time.

[Mike Preston]

I've never seen a mix and match approach. It is usually a greater of the two approach.

[Doghouse]

I went through this last year, and can I just say that the EOB has a pretty good summary of what you need to do. I won't paraphrase it here but it's under the heading "Changing the plan's service crediting method" if you have that resource and want to search for it.

[david rigby]

ERISA Outline Book.
Author is Sal Tripodi.