Eligibility in US plan with foreign divisions.

[dmb]

An employer has two divisions. One division in the USA and one division in the UK. Each division has it's own pension plan and each division has about 400 employees. A small group of the UK employees will be working in the USA division for about 8 months and will be paid in US $$$$. Does the service in the UK division count toward any service requirement for eligibility in the US division's plan??

[Guest]

You need to review the plan document. NonResident Aliens with no US source income are excludable from US plans.

Conceivably, the UK service does not count towards eligibility in the US plan.

[QDROphile]

Being excludable does not mean that your service doesn't count when you finally fall into a covered position. For example, a union employee is excludable, but when the employee becomes a manager, the service for all time with the employer counts for eligibility and vesting.

You need to look at the plan document and you will probably need to look at the rules under sections 414(B) and 414© of the Internal Revenue Code to determine if the UK employer is aggregated with the US employer for purposes of determining who is the "Employer" for purposes of service crediting.

If the UK employees get into the plan, you will need to look at the same rules to determine if the UK employees can get a distribution when they go back to the UK affiliate. You will have to determine if they have terminated employment for purposes of distributions.

Hope for a plan document that excludes them on some other basis.