Breaks in service and 5 year vesting.

[Guest Joseph OConnor]

Out of 23 total years of service, 8 of them are being disallowed because of a break in service. The break was 9 years. The plan won't bridge if the break exceeds the service. The most recent 15 years includes 1987 when 5 year vesting was mandated -- does that make a difference? Is there anything in ERISA that would apply to current employees as opposed to current tenure segments? What sections of ERISA deal with breaks in service? and 5 year vesting?

Thank you.

[Edited by Dave Baker on 07-19-2000 at 12:07 PM]

[david rigby]

As I understand the facts, the Plan is doing exactly what the law says is permitted (not required). That is, if the break equals or exceeds the service, then the plan can ignore the pre-break service.

The exception to this is if the pre-break service gives rise to a vested benefit by itself.

Another avenue to consider is where you were during the 9-year break. For example, if you were employed in another company that was "related" to the first company, then you may get vesting service (but not necessarily benefit service) for that period.

Internal Revenue Code section 411 details the requirements for vesting.

Please re-post if you have follow-up questions.