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Credit Service for Predecessor Employer ... From Date, Through Date. Is this an option?


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Posted

Is it permissible to include service within a specified period of time from a predecessor employer? For instance, only service completed since a certain date, or through a specific date?

In what is a unique scenario for our firm, we have a Plan where the Sponsor is a group of various health practices which have banded together to form one large corporation, where each "original" practice now owns a piece of this new company. 

When we originally established the Plan we credited all service from each predecessor employer, because those practices no longer employed the Larger group's employees, and these practices wanted the employees to become eligible based on their service with their practice. 

A new practice is joining the Group. For administrative reasons, we wish to exclude service with that employer prior to a certain date (1/1/2017, for example). This is to save us/the Sponsor from having to review whether or not any of the 500+ employees worked for this new practice at any time since its inception (30+ years). We wouldn't want to recognize all years, having the unintended side effect of resulting in an employee of another practice becoming eligible (and costing that practice owner the Profit Sharing contribution). At the same time, we don't want to ignore all service with the new group, preventing them from becoming eligible for the new plan. 

So, can we recognize / credit service from a predecessor employer during a specified period of time?

R. Alexander

Posted
6 minutes ago, Belgarath said:

Yes. If you are using a pre-approved document, check the service crediting portion - the document usually will provide for such an option.

Thank you, Belgarath. Ours is a pre-approved VS (DATAIR) and provides only a spot to enter the company name, but not a "service from [DATE]" option. 

Ideally the best option is to edit the "Credit Service" section where the companies would otherwise be listed to add fields for EIN, Credit From [DATE], and Credit Through [Date]. But that assumes that crediting from/to certain dates is allowable. 

R. Alexander

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