Can employees that have worked in their foreign offices have their time counted towards eligibility and vesting when they come over to the US?

[Chris123]

My question is the following:

Corporation A maintains a 401(k) Plan in the US.

Corporation A is a US company with foreign subsidiaries.

Corporation A has a number of employees that come and work in the US from their Canada and Paris offices. 

Can employees that have worked in the foreign offices have their time counted towards eligibility and vesting when they come over to the US?

[justanotheradmin]

I'm sure someone else will chime in with a more detailed answer - 

My short answer - Why not? If it is a related employer group (control group, affiliated service group, etc) usually all service counts, even while part of an excluded class. When an employee changes status from an excluded class to a covered class, all of that prior service still counts, it doesn't go away. 

Also - what does your document say? If you use a document that has a basic plan document, I would read any portions on related employers, changes in employee class, etc. I'm guessing the plan excludes the foreign subsidiaries entirely either by business entity, or as non-resident aliens with no U.S. source income - but I would double check that too. I have had plans that thought they didn't cover their offices elsewhere - but in actually reading the document, turns out those employees were eligible and covered by the plan. Poor drafting can have a huge impact. 

If all of the entities involved are large and there are any QSLOBs then there are probably special rules. 

Even if that service is excluded - usually plan documents can be amended to credit service from other entities if needed. 

[CuseFan]

I think if it is control group then service has to count for eligibility and vesting. They just go from not an eligible employee to an eligible employee, similar to moving from non-participating affiliated employer to a participating employer, or from union coverage to non-union. Document language should specify and support.

[David Schultz]

They not only can, they must.  All service counts (unless the foreign employer is "unrelated" to the plan sponsor).

[imchipbrown]

There's only one company (Corporation A), right?  So, doesn't matter where you work.  When we get to Mars, I hope our service counts while up there (and during the commute).

[Chris123]

Appreciate the responses everyone. 

Justanotheradmin, the document provides that non-resident aliens with non U.S. source income are excluded. 

Looks like all we're going to need is their original date of hire to assure there is no interruption as to their service once they transfer over to the US entity. 

Thanks again!