Amendment to Change Method for Crediting Service

[ERISAAPPLE]

Is there any guidance on how to administer a plan amendment that changes the method for crediting service from equivalencies to actual hours, or do we just give all employees the greater of the two?

[My 2 cents]

28 minutes ago, ERISAAPPLE said:

Is there any guidance on how to administer a plan amendment that changes the method for crediting service from equivalencies to actual hours, or do we just give all employees the greater of the two?

Is this being done prospectively (i.e., all service before 1/1/18 will be calculated as before and for plan years beginning on or after that date, service will be determined based on actual hours) or retroactively?  If the latter, you probably have to protect the service as of the date of the amendment based on the prior rules.  Certainly, you can bump the service up if actual hours produce that result, but the amendment absolutely, positively CANNOT reduce accrued benefits or vesting percentages.

Did the plan call for hours but did administration use equivalencies because hours were not generally available?  If so, perhaps no amendment is needed at all and one just refines the method for calculating service by digging out actual hours.  Might not need any grandfathering that way.

[ERISAAPPLE]

The change is being made only for eligibility, so we are not talking about accrued benefits or vesting.  I assume you are not aware of any guidance, based on your answer.  Your answer does suggest my initial thought, which is just give them the greater of the two.  I think that is the most prudent approach.  

[AKconsult]

I would be inclined to calculate each person's hours based on the equivalency method up through the date of the amendment, then start counting actual hours after that point, and add that to the equivalency hours  to determine the total hours for the year.