Eligibility - Ft William Document

[coleboy]

Client has 6 month continuous service for eligibility. The FT Williams adoption agreement says 6 consecutive months of continuous service( not to exceed 12 hours of service fail safe applies.). I've never seen this before. Would the service spanning rule apply in this case?

[ESOP Guy]

59 minutes ago, coleboy said:

Client has 6 month continuous service for eligibility. The FT Williams adoption agreement says 6 consecutive months of continuous service( not to exceed 12 hours of service fail safe applies.). I've never seen this before. Would the service spanning rule apply in this case?

Do you mean 12 months not 12 hours by chance? 

It is my understanding the service spanning rules still apply even when a document says "continuous" service.  And maybe the definition of "12 month service fail safe" means that.  That is the term I am not sure what they mean.  Is that term defined in the Base Document?

[coleboy]

Sorry, I wrote it incorrectly in my haste! Below is the actual excerpt from the Ft William adoption agreement:

[ X ] Completion of 6 consecutive months of continuous service (not to exceed 12 - hours of service failsafe applies)

An FT Williams person said that this election is an hours requirement not an elapsed time. They said a person must work at least 1 hour a month.

An employee worked a few months then was gone 3 months due to a broken wrist and has now come back. I am trying to determine if she is eligible or not.

 

 

 

[401king]

If FTWilliam is claiming that this provision requires hours worked then I am inclined to take them at their word. Does the Plan Document expound on this at all?

[RatherBeGolfing]

4 hours ago, coleboy said:

Sorry, I wrote it incorrectly in my haste! Below is the actual excerpt from the Ft William adoption agreement:

[ X ] Completion of 6 consecutive months of continuous service (not to exceed 12 - hours of service failsafe applies)

An FT Williams person said that this election is an hours requirement not an elapsed time. They said a person must work at least 1 hour a month.

An employee worked a few months then was gone 3 months due to a broken wrist and has now come back. I am trying to determine if she is eligible or not.

 

 

 

They know their document very well.  That election is an hours requirement, not elapsed time.  There is another election that specifies months and elapsed time, in which case the ee would only need 1 hour in the first and last month to count all the months.

The failsafe for your election is 1000 hours.  An ee who worked more than 1000 hours in a 12 month computation period but failed to work at least 1 hour per month for 6 consecutive months would still satisfy eligibility.

[coleboy]

Thank you for the clarification!

[Doc Ument]

As I understand it, if the document contains a 410(a) fail-safe provision of a year of service using the hours method, then this plan design is essentially the same thing as saying that the service requirement is the earlier of (1) a year of service using the hours method, or (2) six consecutive months of service.  Such a provision complies with the hours method, and thus there is no service-spanning rule in determining this particular six-month provision.   There are certainly preapproved plans with this design.  A plan without a 410(a) fail-safe provision of one year of service using the hours method would have a problem.

[Mike Preston]

...would *potentially* have a problem, yes?

[Doc Ument]

As a matter of best practice, I agree I should have said  a plan that appeared to require six consecutive months of employment without a 410(a) fail-safe provision could "potentially" have a problem.