Change in Eligiblity

[coleboy]

We took over this calendar year plan effective 4/1/16. At that point they wanted to change the eligibility from immediate to 1 year of service. Does this change become effective on 4/1/16? If so, does that mean that anyone hired prior to that ie Jan., Feb., March '16 are eligible and anyone after that has to work 1000 hours? What about people in prior years that immediately came into the plan? Do they now have to work 1000 hours beginning 4/1/16?

Sorry if this has already been address but I'm a one person shop and I have no one to bounce things off of.

 

 

[Tom Poje]

well, maybe yes maybe no

you can certainly change eligibility and even someone who was previously eligible could become ineligible.

I suppose in the adoption agreement

Special Participation Date

a. [ ] Allow immediate participation for all Eligible Employees employed on a specific date. All Eligible Employees employed

on shall become eligible to participate in the Plan as of _________

.............

so lets say you only wanted this prospectively, a date of 3/1/2016 could have been filled in, and thus have the effect of a 1 month wait up until 4/1/2016.

on the other hand, some document language simply says

something like "Anyone who was a participant prior to the effective continues to be a participant, bleh, bleh, bleh"

 

[RatherBeGolfing]

I agree with what Tom said above. 

An additional quirk that was brought up in a somewhat recent discussion on this is to make sure that you are 100% clear what your document provides when you change eligibility.  Some documents might say that current participants stay in unless expressly excluded.  Depending on your type of document you would probably have to dig around in your basic plan document to find it, and then structure your amendment to get the result you want.