Hardships and Rehire

[52626]

On 12/5/2016 the participant took a hardship distribution

On 12/27/2016 the participant terminated employment 

Employee is rehired on 3/28/2017

Under the terms of the plan, the participant re-enters the plan as of his re-employment date.

the questions is - does the prior 6 month suspension remain in place and the participant can not defer until June 2017? Or, is the 6 months suspension disregarded since the participant terminated and then was rehired.

 

Thanks

 

 

[CuseFan]

I think there isn't a one-year break-in-service so you treat as if they never left, in terms of participation, and so the clock is still ticking from 12/5/2016. Not that it matters for this, but did this person get a distribution right before they were rehired? If so, I'd be more concerned about potential "sham" terminations/retirements to skirt distribution restrictions and get at retirement funds.

[52626]

the participant did not take a distribution before being rehired.  they had the proper documentation to support the hardship.