Adoption vs. Effective Date of Corrective Amendment

A plan adopts a 1.401(a)(4)-11(g) corrective amendment on 10/14/22 with an effective date of 1/1/21. The amendment adds employees to the Plan that complete 1 year of service. An employee completed one year of service for the Plan year 2021 based on the 1/1/21 effective date. However, this individual terminated service on 3/1/22 which was 7 months before the amendment was adopted. Since she terminated service prior to the adoption date does she still meet the one year of service requirement? I would say she does since the effective date of the amendment is controlling. Any thoughts?

Effective date.

Thank-you Lou. I have the same conclusion, and I could not agree with the claim of the Plan sponsor attorney that since the individual was not a Plan participant on the adoption date that he is not entitled to Plan benefits.

Did the Plan's attorney draft the amendment to specifically exclude participants/employees not employed on the adoption date?

No, there was no such amendment.

I'm confused by the OP. What was the employee's DOH? And when did the employee complete a year of service? Was the employee eligible to participate on 1/1/21 or would the employee have been eligible to participate on 1/1/22?

We need to keep in mind that this is an 11(g) amendment adopted on 10/14/2022 after the close of the 2021 plan year and effective retroactively to 1/1/2021 = the beginning of the prior plan year.

The OP says the amendment adds employees to the Plan that complete 1 year of service with no further clarification.   The employee in question completed 1 year of service for the 2021 plan year.  The fact that the employee terminated in the 2022 plan year on 3/1/2022 is not relevant with respect to the 2021 plan year.

With an 11(g) amendment, we can pick and choose who gets to participate in the prior plan year and only need to add enough participants to pass coverage.  The amendment could have specified additional criteria to restrict who was includable in 2021 but apparently did not do so.  Unless there are more facts than have been presented such as the EBP's employee service history questions , this employee should have been included as participating in the 2021 plan year.