Eligiblity of a Rehire

[Lou81]

Need some help.

Plan has 1 year of service, 1000 hours and dual entry.  FTW Document -  Rule of Parity & 1 year hold out is not elected

i have an employee hired 8/2020 termed 3/2021.  Worked over 1000 hours

Rehired 8/2022

Since she worked over 1000, would she enter on rehire date?

Appreciate your help.   Thanks!

[ESOP Guy]

Most likely the answer is "yes".

But read the base document if it is a prototype or volume submitter.  I am willing to bet it tells you exactly how to work out when such a person comes into the plan. 

I don't really see a good path to keeping this person out but the document rules and if it is at all written well it tells you what happens to a person who met the eligibility requirement, termed and is rehired.  

[ratherbereading]

But if it's 1 year of service AND 1000 hours, would it not be no since she didn't initially complete a year of service? 

[Bri]

I think it's one of those things where, the year is deemed complete at the end of the 12 months, as long as the hours were hit.  The 12 month period has elapsed, the 1000 hours were met.  The document language will govern, of course, but I think that's usually how they're phrased.

[ESOP Guy]

2 hours ago, ratherbereading said:

But if it's 1 year of service AND 1000 hours, would it not be no since she didn't initially complete a year of service? 

Not the way I see plans written.  If you find the definition of the Year of Service the 12 month period is just the period you look to see if the person worked 1,000 hours. 

Here is an example: 

The term "Year of Service" means, with respect to any provision of the Plan
in which service is determined by the Counting of Hours Method, a 12-consecutive month
computation period during which an Employee is credited with at least a specified number of Hours
of Service with the Employer..

 

So the 12 months is the period you ask did they work 1,000 hours.  It doesn't require you to work all 12 of the months.  It is a computation period as it says.  I typically explain it to my clients this way:

We just look to see if 1,000 hours was worked during that time frame we don't need them to work all 12 months.

Check some of your client's documents and see if that isn't how it is defined. 

[G8Rs]

I agree with ESOP Guy.

She completed a YOS (1,000 hours were completed between 8/2020 and 8/2021). You can't require employment at the beginning or end of a computation period, although employment is needed to start the first computation period. But after the initial computation period, employment at the beginning of the period isn't required.

She wasn't employed on the plan's entry date so she didn't enter.

Prior service counts (no 1 year hold-out rule and the rule of parity wouldn't apply even if the plan included it).

She is rehired in 8/2022, which is after the entry date that would have otherwise applied. Therefore, she enters on the rehire date.  

[Lou81]

Greatly appreciate it.  Thank you.