Days vs Months for eligibility

Why do companies put in days instead of months for a service requirement? It is MUCH easier to figure it out with months as the baseline.

For example, a plan requires 60 days of service, monthly entry (next or coinciding). Employee is hired July 3. When does she enter the plan? September 1. That's 60 days of service.

What if it was April 3? June 1? Nope. July 1. 60 days of service is June 2.

If it was two months of service, it's much easier. Anyone hired on the 3rd of the month enters the same day: first day of the third month after hire. No counting days. No missed deferral opportunity.

Someone hired on Aril 3 has to wait 28 more days to enter the plan than someone hired on July 3.  Doesn't make sense.

Does the plan's governing document include a definition for day of service?

Does that definition count all days someone is an employee, or only days the employee worked?

How do the plan's provisions apply to someone who works on only two days in each week?

Would the plan's definitions and provisions always result in measurements like your examples?

Even if the governing document's provisions are complete and clear, is it possible someone in the sponsor/employer imagines that "days of service" means something different than what the plan provides?

Is it possible the sponsor prefers a term that relates to a record in the employer's human-resources-management or payroll systems?

When a company wants to have 401k plan and health insurance enrollment occur on the same day, we will use either 30/ 60 days because this is the way the health insurance documents are written.

On 6/14/2022 at 4:01 PM, BG5150 said:

Why do companies put in days instead of months for a service requirement?

Or as Forrest Gump says, .... 

Some of it is the people who decide these things  aren't the same people who have to live with those provisions.  With the clients I work with it is often times a CEO, attorney and maybe some kind of consultant helping set up an ESOP.   They don't ask HR or the TPA they are thinking of hiring for their thoughts.

So the consultant or lawyer says this provision makes sense for this or that reason and it is legal.   The CEO thinks that makes sense. 

So you end up with a staffing firm that hires hundreds of people a year with a 60 day eligibility you enter on the day those 60 days are up with compensation from entry provision.

When I sent a list, that took a long time to create, to HR asking for over 200 people's comp from date of entry which was a different day of the year the head of HR demanded the plan be amended.   The CEO looked at how many man hours getting the data was going to take, HR was saying they were going to have to hire some of their own temps to do the work, he agreed to amend the plan. 

What is legal and smart are often times very different in this business. 

I feel what you are talking about is what I am saying. 

Or an employee-benefits lawyer who is not only knowledgeable but also experienced with these and other practical problems seeks to involve a few people to help get more carefully considered decision-making, but is told her client won’t pay for that time.

@BG5150 Don't forget to check that the document doesn't define a month as 30 days regardless of the calendar, for some providers there is no difference.  And does it count a full month, or give credit based on a certain number of days?